■•■■> CORNELL LAW LIBRARY EM Cornell university Library KF 940.E26 1893 A treatise on the law of baHS!,?,^* Cornell University Library The original of tiiis bool< is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018857684 A TREATISE LAW OF BAILMENTS, CONTRACTS CONNECTED WITH THE CUSTODY AND POSSESSION Personal Property. BY ISAAC EDWARDS, LL. D. THIRD EDITION REVISED AND ENLARGED BY EDWIN BAYLIES. THIieiD EDITIOIST. BANKS^ & BROTHERS, NEW YORK. ALBANY, N. Y. 1893. ^.a^i^i if^ Entered according to Act of Congress, in the year one thousand eight hundred and fifty-five, by GOULD, BANKS & CO., In the Clerk's Office of the District Court of the Northern District 6f New York. Entered according to Act of Congress, in the year eighteen hundred and seventy-eight, by BANKS & BROTHERS, In the Office of the Librarian of Congress, at Washington. Entered according to Act of Congress, in the year eighteen hundred and ninety-three, by BANKS & BROTHERS, In the Office of the Librarian of Congress, at Washington. TREATISE UX THE LAW OF BAILMENTS. CHAPTER I. ON BAILMEKTS. § 1. The delivery of goods in trust for a specific purpose, termed a bailment, is a species of contract frequently implied by law. The con- tract results from the delivery of the goods for a particular use or pur- pose. According to Mr. Justice Blackstone, " Bailment, from the French bailler, to deliver, is a delivery of goods in trust upon a contract, express or implied, that the trust shall be faithfully executed on the part of the bailee." ^ According to Sir William Jones, it is " a delivery of goods in trust on a contract, expressed or implied, that the trust shall be duly executed, and the goods redelivered as soon as the time or use for which they were bailed shall have elapsed or be performed." ^ This definition, accurate so far as most kinds of bailment are concerned, has been criticised as defective, because it does not include chattels delivered for sale, or under such circumstances that a return of them is not contemplated. Indeed, it is not easy to express in a single sentence all those conditions, and those only which accompany every case of bailment. Mr. Justice Story defines bailment as " a delivery of things in trust for some special object or purpose and upon a contract, express or implied, to conform to the object or purpose of the trust." ' On the other hand, Kent gives this definition : Bailment is a delivery of goods in trust, upon a contract expressed or implied that the trust 1 2 Black. Comm. 452. ^ jones on Bailm. 117. " Story on Bailm. § 2. 2 Law of Bailments. shall be duly executed and the goods restored by the bailee as soon as the purpose of the bailment shall be answered.^ § 2. These definitions agree in nearly all essential particulars, and disagree in two or three respects. Jones and Kent assume that the property is to be returned, while Blackstone and Story include contracts under which no such return is contemplated. This is not merely a difference in the form of expressing the same meaning. Story intends to include among contracts of bailment a delivery of goods for sale ; and Kent intentionally limits his definition so as to exclude that species of contract. A delivery of merchandise to a factor for sale constitutes the relation of principal and agent ; but the right of the principal to prescribe the terms and time of the sale gives to the contract, expressed or implied, between the parties, the elements of at least one species of bailment. If the owner directs the factor to hold the goods until further orders, the relation of the parties thereupon arising can hardly be distinguished from the relation subsisting between bailor and badee.^ There are also instances of the delivery of goods under a commission," not to speak of the delivery of goods to a carrier for a purchaser residing at a distance, in which a return of the property is not contemplated.^ A perfect definition ought to include everything essential in every con- tract of bailment, and should exclude everything which is not essential. Among other things, it should contain a description of the kind of property which may be the subject matter of the contract. In general terms, it may be said that the delivery of goods or any other species of personal estate for use, keeping or on some other trust, where the gen- eral property does not pass, creates a bailment. A delivery of chattels upon a sale made on condition that the title shall pass on the payment of the purchase money at a future day, is something more than a bail- ment ; it gives the buyer a conditional title.* If the contract gives the buyer a definite credit or a reasonable time within which to pay, it gives him a transferable interest in the chattels until the credit expires, and the property in them as soon as he pays the price.^ ^ Kent's Comm. 55S. 2 Per Lord Holt, in Coggs v. Bernard, 2 Ld. Eaym. 917, 918; Morss v. Stone, 5 Barb. 516. The delivery of a chattel to another under a contract that the latter shall safely keep, and if possible, sell it for the owner before a certain day at not less than a price specified, and if not, should return it in good condition, constitutes a bailment. Middleton v. Stone, 111 Pa. St. 589. s Jourdan v. Eeed, 1 Clarke (Iowa), 135; the case of a delivery of gold to be delivered to the bailor's wife. * Hasbrouck v. Lounsbury, 26 N. Y. 598. 6 Bailey v. Colby, 34 N. H. 29; Vincent v. Cornell, 13 Pick. 294. The contract gives On Bailments. 3 A bailment of choses in action may be created where the title passes in form to the bailee ; ^ certificates of stock are daily given in pledge by a formal transfer of title — a transfer being the only way in which such property can be delivered. Tlie absolute title, that is, the general property in the stock or in the choses in action, does not pass.'' The contract of bailment is very often implied from the circumstances attending the delivery of the goods. The usual definition assumes that there is a contract, either expressed or implied, in every bailment ; and it is clear that the bailee is held bound to the performance of his duties on the theory of contract. There are cases, it must be admitted, in which there is an apparent want of consideration ; e. g., where one loans a chattel gratuitously for an indefinite length of time ; or where one man accepts the custody of property to keep or to carry without com- pensation. In reality the contract in each of these cases is executed on part of the bailor ; he has delivered the property ; and it remains execu- tory on the part of the bailee. The consideration is valid, though it be not beneficial to the party promising ; and the contract having been partly executed is valid, notwithstanding the election given to one of the parties to withdraw from it or to terminate it." Hence there is nothing in the cir- cumstance that the gratuitous lender has the right to terminate the agree- ment and take back his property, or in the fact that the depositary with- out reward has the right to restore the goods and thus put an end to his liability, to repel the theory of a contract. On the contrary, these rights assume the existence of the contract and grow out of it.* § 3. Authors of received authority on the subject generallj'- specify five sorts or classes of bailment, which are defined as follows : 1. Depositum, that is, a simple delivery or deposit of goods, to be kept and returned without recompense. The depositary is here under but a limited liability, being answerable only for gross neglect. As he receives no reward for the service, the law does not render him respon- sible for anything more than the ordinary care which he bestows upon his own property of a similar nature. 2. Mandatum, or commission, is a species of bailment where the no title where the goods are delivered on a condition that they are to remain the seller's property till paid for. Ballard v. Burgett, 40 N. T. .314; Austin t. Dye, 46 N. Y. 500 ; Cole v. Mann, 62 N. T. 1 ; Kodney Hunt Machine Co. v. Stewart, 57 Hun, 545; Frank v. Batten, 49 Hun, 91. 1 Campbell v. Parker, 9 Bosw. 322, relates to the pledge of a bond and mortgage. 2 Wilson V. Little, 2 IST. Y. 443. 'Rutgers V. Lucet, 2 John. Cas. 92; Miller v. Drake, 1 Gaines, Eep. 45, 46; Giles V. Bradley, 2 John. Cas. 253, 254; Towers v. Barrett, 1 Term Rep. 133. ^ Orsen v. Storms, 9 Cowen, 687; Roulston v. M'Clelland, 2 E. D. Smith, 60. 4 Law of Bailments. bailee receives goods, and without reward undertakes to do some act about them, or simply to carry them. This kind of undertaking does not differ materially from that of the bailee in the case of deposit; the duties and liabilities arising out of it are very similar. The actual en- trance upon the work to be performed is the ground of liability, since an executory contract of this nature cannot be enforced, wanting, as it does, the essential ingredient of a consideration promised or received.^ 3. Oommodatum is the loan or bailment of goods to be used for a cer- tain time and then returned to the owner, and is made for the accommo- dation of the bailee ; as the loan of a horse or carriage, from which the owner derives no benefit. 4. Property delivered in pledge for debt, pignori acceptum, is a bail- ment in the nature of collateral security. The title remains in the pledgor, so that under our statutes it may be levied upon and sold as his property, but after the sale, the pledgee is entitled to the possession of it until the purchaser redeems it from him. At common law, however, goods pawned or pledged are not liable to be taken in execution in an action against the bailor ; ^ and the special property of the pavtTiee gives him a right of action against the of&cer who assumes to take them,' and even against the owner himself who wrongfully attempts to repossess them.* For the purposes of the pledge he acquires a paramount right over the property, and is responsible for ordinary neglect. If he con- vert the property to his own use, or dispose of it in any manner con- trary to the trust, he is liable to the owner for its value.^ Goods are delivered in pledge for the mutual benefit of the parties to the contract ; and hence the responsibility of the pledgee is the same as that of the bailee for hire. He has an advantage from the security it furnishes him for the payment of his demand, and the owner of the things pledged gains a credit; so that in the eye of the law the parties stand upon an equal footing. 5. A hiring," termed in the civil law locatio conduction is a bailment of goods always for a reward, and includes the hire of things for use, loca- tio rei ; the hire of deposit or storage, locatio custodiw ; hire of labor and services to be performed on the goods dehvered, locatio operis-faciendi ; and hire of carriage, locatio operis mercium ve/icndarum. Hire for use, such as hiring horses and carriage for a journey, is a bailment of prop- 1 Thorne v. Deas, 4 John. Eep. 84. 2 Steif V. Hart, 1 Comst. K. 20, and cases cited by Jewett. J. * 5 Binney, 457. ■* Mills T. Stewart, 5 Humph. R. 308. ^ Jones on Bailm. 121, « Jones on Bailm. 86; and Story on Bailm. § S. On Bailments. 5 •erty which renders the bailee responsible for ordinary neglect.^ The hire of deposit, such as the storage of goods by commission merchants and warehousemen,^ concerns the custody, and requires ordinary diligence in the bailee. Innkeepers, from motives of public policy, are held to a much higher responsibility. Where work is to be done on the property, as where cloth is left with a tailor to be made into clothes, or logs at a saw mill to be converted into boards, it is termed a bailment for labor and services, and the bailee is liable for ordinary neglect. In such ■cases there is an implied contract that the work shall be done in a work- manlike manner. The hire of carriage, or transportation of goods by a ■common carrier, is such a bailment of goods as renders the bailee liable for them without any neglect, unless the loss be caused by inevitable accident, by public enemies, or by the act of the owner of the property. The policy of the law holds him to a strict accountability, and makes him in effect an insurer of the goods.' x § 4. The various degrees of liabihty imposed on the bailee are grad- uated by the circumstances attending the trust. He that borrows his friend's horses or books, clearly is in honor bound to take vigilant care of them, so that the lender may not suffer by his kindness ; and the principle that holds the borrower responsible for even a slight neglect of this duty is confusedly just. Every one readily recognizes it as a nat- ural obligation. (So, where the owner of property deposits it with his neighbor, who receives it into his house or store without pay, and solely as an accommodation, it is plain that, if he take the same care of it as he does of his own goods, nothing more can in fairness be demanded of him. Unless he be guilty of gross neglect, which is morally as well as legally a breach of good faith, he ought not to be responsible for lossT] The rule of equity is the rule of law in such a case. Every man is bound under all circumstances to deal honestly, and that is the limit of his responsibility as a mere depositary. Where, however, he volun- tarily and oflaciously proposes to keep the goods of another, there is a sound reason why he should be held to a stricter liability, since by his own act he may have prevented them from being stored in safety. If he press himself into the undertaking, or make an express agreement to keep them safely, he must, in honesty, exercise ordinary prudence in its fulfillment. When the relation so far changes that both parties derive an advan- tage from the contract, it is easy to perceive that the Uability must change 1 Milion V. Salisbury, 13 J. K. 211. 2 Knapp V. Curtis, 9 Wend. 60. « 12 Mod. 482; Jones on Bailm. 108; Forward v. Pittard, 1 Term Kep, 27; Hyde V. The Trent & Mersey Kavigation Co., 5 Term Eep. 389. 6 Law op Bailjients. proportionably ; as where property is hired to be used, and a compensa- tion is paid for the use. Here there is no inequality between the owner and him who receives the property in trust. The price of the hire bal- ances the use, so that neither owes to the other any special obligation. The contract between them is one of ordinary business, from which both derive a benefit of profit or convenience. In the employment of property received under such circumstances, it is obvious that the hirer can only be held responsible for the use of ordinary care and common prudence in its preservation. It has sometimes been said, that he is bound to the exercise of all imaginable care of goods so received ; but the rule does not go so far.^ If he exercise the common vigilance which the gener- ality of mankind take of their own property, it will protect him from liability. In the absence of an express agreement, the law implies nothing strained or unreasonable ; it is satisfied with_ the usual and ordinary care incident to the custody of another's goods. In the negotiation for hire, it is presumed that a fair price was given for the use of the thing hired, and that the hirer rmdertook to keep it with reasonable care. ISTothing extraordinary, as to the manner of keep- ing or using it, can be presumed to have entered into a contract so common. Property received with a commission or authority to do some act in relation to it, as when one receives money to use in a particular way, imposes the palpable and plain duty of faithfully executing the trust. Though no compensation be paid for the service, the commission must be faithfully executed, and the person undertaking it is understood to stipulate that he will exercise the necessary labor and skill in its execu- tion. Receiving no recompense, if he undertake and execute the trust in good faith, he cannot be held responsible for the issue of the business. He must act with prudence, doing nothing by which his employer may suffer damage, and omitting to do nothing which the nature of the act requires.^ The profession or business of the employee, it is true, may sometimes affect his liability. One who takes property in pledge for a loan of money or a debt due, as well as he who receives it with the view of bestowing labor upon it 1 Jones on Bailm. 86, speaks of the rule with his usual neatness of phrase as estab- lished by the harmonious consent of nations. 2 Jones on Bailm. 53. If one, with whom money has been left to be paid over to a third person on his leaving certain instructions for the benefit of the bailor, exercises the care and prudence that would be exercised ordinarily by a careful business man before paying over the money, he fulfills his legal obligations to the bailor. Cannon Kiver Manuf's. Assoc, v. Faribault Bank, 37 Minn. 394. In case of gratuitous bail- ments the bailee is liable only when chargeable with gross neglect. Ouderkirk V. Central Nat. Bank, 119 N. T. 263. On Bailments. 7 in order to make it more valuable, assumes the reponsibility of keeping it safely. The ground of liability in each case seems to be the trust reposed in the person who receives the property. The manufacturer receiving wool to be converted into cloth, upon an agreement for com- pensation, retains a lien upon the goods until it is paid. The custody is equally for the benefit of both parties. So also in the case of pledging ; the contract is one of reciprocal advantage. The debt perhaps is con- tracted on the understanding that the property shall be taken in pledge for its payment ; or the debt being due, its payment is postponed on the receipt of the pledge. The one party gains a credit and the other security by the contract. The principle of liability is therefore the same as in a hiring for use, and the bailee is responsible for ordinary care, and for every departure from the terms of the agreement. It is also a rule of law, as well as of common equity, that whatever is accessary to the thing pledged shall accrue or be applied to the benefit of the owner ; if it be a bond and mortgage, the interest growing duQ on them shall be credited to him on the debt for which they are in pledge. The common carrier's UabUity, grounded on the hire he receives, is extended by the policy of the law much beyond that of an ordinary bailee. His agreement to carry and deliver the goods at the place of destination may be discharged without performance only in three in- stances, namely, when they are destroyed by the act of God, by public enemies, or by the conduct of the owner himself. The reason of this rule, it is said, is the public employment exercised by the carrier, and the danger of his combining with robbers, to the infinite injury of com- merce and extreme inconvenience of society.^ The difficulty of following the property, and in case of loss establish- ing by evidence the liability of the carrier, seems to be the true ground of the rule ; especially since it matters little what principle prevails, so long as the parties to the contract made their agreement with reference to it. The added liability of an insurer, being perfectly understood, is taken into the account in fixing the price of transportation ; thus in fact the law is stringent in its requirements and at the same time just. It is made the interest of the person having the custody of the goods to keep and convey them safely, so that the carrier, on whom rests the duty, has the interest in and the means of carrying them safely to the place of delivery. No other principle, it may be safely asserted, would so completely unite commercial convenience and economy with the strict demands of private justice. 1 Jones on Bailm. 107; Forward v. Pittard, 1 Term E. 27; Hollister v. Nowlen, 19 Wend. 234, 238. 8 Law op Bailments. The common carrier is by virtue of his occupation a servant of the public, whose duties and responsibilities are regulated with a view to the promotion of the interests which he serves, and are founded upon universal rules of commercial policy. These rules, that have grown up out of usages and customs handed down from the rudest periods, have been corrected and qualified by the experience and wisdom of each succeeding age, so as to form at the present time a singularly consistent system of law. Innkeepers are in like manner and to a like extent liable for the goods of guests stopping with them. In the usual language of the books they are insurers of the property, and nothing but the act of God or public enemies will excuse a loss.^ In consideration of exercising the public business of innkeepers, they are bound to receive and entertain strangers and travelers, and answer for their goods. In part requital of this un- usual liability, the landlord has a lien on the goods for his reasonable charges. The relation of landlord and guest, however, must exist be- fore either the lien or liability can arise.^ Indeed, the lien and liability are coincident, the one supporting the other, and both standing and fall- ing together. The extraordinary responsibility of an innkeeper, like that of a common carrier, is based on a prtuciple of jpublic policy, sus- tained by motives of general utility. The stranger cannot be supposed^ to have at his command the means of showing the precise negligence by which his goods may have been lost. He is compelled to trust to the care of others, without having the means of ascertaining personally the prudence and care of those to whom he confides his property. And hence the law wisely casts upon the landlord the burden of answering for the loss against which he has the best means of providmg. The presumptions of the law are thrown against him, in order that his in- terest may stimulate his vigilance in the safe keeping of property com- mitted to his custody. ) While there is no injustice in this rule, since the innkeeper carries on his business with a perfect knowledge of his liability, there is at the same time the highest public convenience. The exhausted traveler sleeps in security under a watchful care, presided over and enforced by a strict law. The several degrees of diligence required of the bailee m the care of property uistrusted to him under different circumstances, and the kinds of negUgence for which he may become liable, require to be carefully 1 Grmnell v. Cook, 3 Hill, 488; Coskery v. Nagle, 83 Ga. 696. Mason v. Thompson, 9 Pick. 280; Berkshire Woolen Co. v. Procter, 7 Cush. 41V. This is the rule at com- mon law. ^Healey v. Gray, 68 Me. 489. On Bailments. t) marked and fixed in appropriate terms. The language of the law must have a uniform standard value, a sort of technical and scientific precis- ion. In ordiaary speech, it ts sufficient to say that thejDerson having the custody^ of property must keep it with diligence ; but it will not suffice in legal reasoning. Its meaning varies and is relaxed or intensi- fied too much, according to notions of responsibility entertained by the person using it. The idea expressed by it is not a fixed quantity, but rather a quality of attention, differing as much as men differ in the care they take of property entrusted to them. It varies also in respect to the object in reference to which it is employed. § 5. Stated in affirmative form, these several degrees or measures of diligence commend themselves to universal acceptance ; they are the dictates of reason; they rest upon the solid basis of sound morality; and they have been approved and established by a long course of decis- ions. 1. A mere depositary, who receives into his custody goods or chattels for the owner's accommodation, as an act of favor or friendship, is bound to take the same care of them as he does of his own property of a like kind. A mandatary acting gratuitously is bound to the same rule, of diligence. In the absence of any special agreement, the law im- plies an imdertaking by each to keep the property, under ordinary cir- cumstances, with as much care as he does his own. 2. A bailee under a bailment which is mutually beneficial to the parties, is required to use ordinary diligence to preserve the goods entrusted to him ; namely, that care which prudent men take of their own property ; or that care which reasonable men use in their own business. The law exacts greater diligence from the bailee deriving a benefit from the contract, because his engagement is made in the ordinary course of business. 3. When the bailee alone derives a benefit from the bailment, he is bound to use great vigilance and extraordinary care in the use and safe-keeping of the property. As a borrower, receiving the use of goods or chattels gratuitously, he must preserve and return them with very great care. § 6. It is customary to state the rules of liability in a negative form. E. ff., it is usual to state the degree of negligence for which bailees, in these several classes of bailment, are liable. As usually stated, these rules stand as follows : 1. A gratuitous depositary of goods is liable for their value, when they are destroyed or lost through his gross negli- gence ; or by his omission or neglect to take the same care of them which he takes of his own property of a similar kind. 2. The bailee for hire, or for some beneficial consideration, is responsible for losses arising through ordinary negligence, or by his omission to ta^^e that care of the goods entrusted to him which prudent men take of their own prop- erty. 3. The borrower who receives the use of goods gi-atuitously. 10 Law of Bailments. is liable for their loss or injury through slight neglect, or by the failure to use that diligence which very circumspect and thoughtful persons use in preserving their own goods. § 7. Does the law recognize these three degrees of negligence ? Xo one denies that there are differing degrees of negligence, or that the law takes notice of them ; nor does any one deny the liability of a bailee for slight negligence, where like a borrower he alone is to receive a ben- efit from the bailment ; nor is it denied that the bailee is liable for ordi- nary negligence, where the bailment is mutually beneficial to the parties ; neither does any one deny the liability of a gratuitous bailee for gross negligence. But the classification has been called in question ; it has been doubted whether the terms " sUght, ordhiary and gross negligence can be usefully applied in practice." It has even been questioned whether there is any intelligible distinction between negligence and gross negligence, on the notion that, the addition of the epithet gross is mere matter of vituperation which adds nothing to the sense.^ The justness of these criticisms may well be conceded, so far as they call in question the suf&ciency of these terms ; siace in their ordinary use they are really terms of comparison. In legal language, as in conversation, they are used with implied reference to what the situation calls for — with implied reference to the afiELrmative duty required under the cir- cumstances.^ They are recognized by a long course of decisions ; they are used to express a rule of law constantly administered in our courts ; and they are perhaps as definite and certain as the rule itself. An assignment for the benefit of creditors, relieving the assignee or trustee from liabil- ity for losses not caused by willful misfeasance or gross negligence, is fraudulent in law ; because the law holds the trustee to a higher degree of responsibility, and does recognize the different degrees of negligence. RuGGLES, Cri. J: "These distinctions are sufiiciently obvious to the miad in theory ; but it must be admitted that their practical application 1 Steamboat New World v. King, 16 How. U. S. 409; Hinton v. Dibbin, 2 Adolph & Ellis, N". E. 646; Perkins v. X. Y. Central E. R. Co., 24 N. Y. 207; Wilson v. Brett, 11 Mees. & Welsb, 113; Briggs ^. Taylor, 28 Vt. 1S5. See ilarks v. Hudson Eiver Bridge Co., 103 N. Y. 28, 35, 36;, New York Cent. E. E. Co. v. Lockwood, 84 U. S. 357. 2 Philadelphia and Eeading E. E. Co. v. Derby, 14 How. U. S. 486 ; Storer t. Gowen, 18 Maine E. 177; Gill v. General Iron Screw Collier Co., LawEep. 1 C. P. 612; Kelsey v. Barney, 12 N. Y. 42.J, 42<.l; Whitney v. Lee, 8 Metcalf, 91. An act which under certain circumstances would be simply negligent, under other circumstances may be grossly negligent. The same act or omission under varying circumstances may con- stitute different grades of negligence. Pegram v. Western Union Tel. Co. 97 N" C. 57; Hunv. Gary, 82 K. Y. 65, 71. On Bailments. 11 to particular cases is sometimes difficult. They appear, however, to be well established and generally acknowledged ; and the clause in the assignment which gives rise to the present controversy seems to have been drawn with reference to their existence and practical operation. The assignee is not exempted from accountability for gross negligence, but is exonerated from the consequences of negligence m any inferior degree." ^ The rules of pleading are often appealed to as good illustrations of the rules and principles of the common law. The old form of declara- tion in assumpsit against a bailee without reward, alleged among other things that the defendant so negligently and carelessly conducted him- self that through his negligence the goods were lost to the plaintiff. The same allegation was made in an action against a bailee for hire.^ The allegation in both of these cases measures the degree of negligence for which the bailee is liable ; and it tacitly implies that the bailee is liable whenever he has so carelessly and negligently conducted himself that the goods are lost to the plaintiff or injured to his damage. While there- fore the rules of pleading do not in form recognize the different degrees of negligence, they do assume that the law proportions the care required of a bailee to the natural dangers to which the goods are exposed ; and they do fairly imply that the bailee is liable for such carelessness as actually results in a loss, where his negligence is the direct and pro- ducing cause of the loss or injury.'' § 8. It is desirable to have these rules of duty and liability imposed by law upon the bailee expressed in terms that convey a uniform and fixed meaning ; and yet every one knows that these and similar terms vary in their signification, from different causes. Used by one person, they do not express exactly the same sense as they do when spoken by another. Men differ in their sense of obligation, so that the same word of duty spoken by different persons does not express a fixed meaning, as it does when spoken with reference to a physical law or fact of natural science. The sense of the terms is also modified by the situation or circumstances in regard to which they are spoken. Ordinary care of one kind of property is not the care required of a different species of property : a package of money requires one kind of care, and a span of 1 Litchfield v. WMte, 3 Sandf. S. C. R. 545; S. C. 7 K. T. 438. The assignee is chargeable with the care and diligence of a provident owner, and liable for a loss by ordinary negligence. Matter of Dean, 86 N. T. 398. « Yates' Pleadings, 246, 250. 8 The degree of negligence is discussed in Bissell v. TheN. T. C. R. E. Co., 29 Barb. 602, 612; S. C. 22 N. T. 258, 305; and in Wells v. N. T. C. E. R. Co., 24 N. T. 181; and in Whitney v. Lee, 8 Met. 91 ; and in Foster v. Essex Bank, 17 Mass. 479. 12 Law of Bailjients. horses another. In one community the danger of loss from theft may not be very great ; while in another, being much greater, it calls for proportionate vigilance. Ourt)anks and safety deposit companies, with which negotiable bonds and securities are left for safe-keeping, build with a view to defend themselves against dangers of this kind ; they construct their vaults and employ watchmen to defend themselves against losses by robbery ; in some of our cities they even construct a telegraphic wire, so that the burglar unwittingly reports himself and his crime to the headquarters of the police. In other locaUties, where but few securities of this kind are found, and the crime of burglary is scarcely known, precautionary measures of safety like these are rarely taken ; and it would be hardly reasonable to hold the omission to take such measures, proof of negligence. § 9. Strictly speaking, the law does not allow neglect of any kind in the execution of a contract.^ Its rule varies only in respect to the care it exacts under varying circumstances. The borrower must be very circumspect and careful of goods and chattels, the use of which he receives gratuitously. The relation in which he stands makes it appro- priate that the law should be construed rigorously agamst him for his acts of neglect. Having received a favor, it is adjudged a great fault in him to be guilty of even a slight negligence through which the confidence and trust reposed in him are converted into an injury to his friend. In effect these differing degrees of neglect are only so many accents of mUdness or severity in which the law, according to the attending circumstances, pronounces the same principle of equity.^ AYhere the contract is one of ordinary business and gainful to both the parties to it, no special care is required, and common prudence will satisfy the rule of liability. And in the case of a naked deposit, without reward, the construction becomes still more favorable to the bailee, whose situation with reference to the goods does not impose upon him the same watch- ful diligence usually bestowed on property stored for hire. In all cases, indeed, there is an admirable and intimate relation between the duty of 1 Story on Bailm. § 17. 2 In its true and genuine meaning, equity is tlie soul and spirit of all laws. Positive law is construed, and rational law is made by it : in this, equity is synonymous with justice; in that, with the true sense and sound interpretation of the rule. 3 Black. Comm. 429. A sentence from Hooker is very often quoted as expressing the highest idea of abstract and pure law. " Of law no less can be acknowledged than that her seat is the bosom of God, and her voice the harmony of the world; all things in heaven and on earth do her homage, the very least as feeling her care, and the greatest as not exempt from her power." On Bailments. 13 the bailee and the consideration he receives as a reward, or as a motive for entering upon the execution of the trust. The principles embraced in the law of bailments, origuially in a great measure derived, like our principles of equity, from the civil law, com- pose a system of a somewhat complex nature, involving many nice distinctions, and a great variety and extent of interests. Contracts im- plied by law, manifestly must be modified by the customs and course of trade. Liabilities imposed by public policy, must be enforced w^ith a vrise reference to the conservation of the general interest. Engagements of a voluntary nature, fairly entered upon, are to be carried into effect equitably and in good faith ; and the numerous trusts accompanying the delivery and possession of personal property, modified as they are by the circumstances of each case, and guarded by well de- fined principles of law, evidently require a high degree of care in their enforcement. On the principle that no man can be wiser than the law, it is evident that only legal reasoning can be of service in its elucida- tion. The appeal must be constantly made to the reported decisions of the courts, which the great master of English jurisprudence has so hap- pUy termed the witnesses of the law. From a fair canvass of these "witnesses we shall derive the elements and principles which make up the main.body of our laws of bailments.^ 1 In the infancy of om- common law system, judicial decisions rested solely on the oral testimony of suitors or witan, who bore witness to the judgments which they or theirpredecessors had pronounced. They remembered and recorded them. In progress of time their judgments were committed to writing as records of court, and to give them greater publicity, they were at length put forth periodically in the shape of reports. Warren's Law Studies, 404. See 31 N. T. 290, with reference to the con- struction of a statute. 14 Law of Bailments. CHAPTER II. DEPOSITS : CONTRACTS INVOLVING THE CUSTODY OF PERSONAL PROPERTY. § 10. A delivery of goods to be kept and returned without recom- pense, creates a bailment ; it is called a deposit ; the distinguishing feat- ure of the contract is that the keeping be gratuitous. Allowing for a certain difference in the circumstances, the engagement of the depositary is the same in substance as that of the mandatary who receives money or goods under a commission ; each of them acts gratuitously. He receives no compensation for his services.^ How then can the parties make or the law imply a valid contract ? The law does not imply a promise from a mere moral obligation ; nor will it enforce a naked promise, such as a promise without consideration to become a mandatary or a depositary.^ But when a person actually enters upon the trust and receives the property into his custody, the confidence reposed in him and his undertaking will raise a sufficient consideration.^ After that he is bound to perform his engagement and execute the trust.* It has been strongly urged that an undertaking of this nature cannot be considered a contract ; though it is admitted that it imposes an obligation to act fairly and with reasonable diligence.^ But the criticism is rather one of form than of substance. The party accepting the trust voluntarily comes under an obligation, and there can be no impropriety of speech in calling such an undertaking a contract." 1 2 Kent's Com. 560; Code of Louisiana, art. 2900. " Edwards v. Davis, 16 John. 281; Thome v. Deas, 4 John. 84; Ehle v. Judson, 24 Wend. 97. 2 Rutgers v. Lucet, 2 John. Cas. 92. * Elsee V. Gatwood, 5 Term. R. 143. 5 16 Amer. Jurist, 264-2~5. 8 Wells V. N. T. C. R. R. Co. . 24 N. T. 181. Although a gratuitous promise to per- form some act with respect to the property of another does not bind the promisor, yet if the act is performed the promisor will be liable for any injury resulting from a want of due care. Melbourne v. Louisville & N. E. R. Co., 88 Ala. 44.3. In some cases it is held that bailments for the benefit of the bailor, such as depositum or mandatum, are founded upon express contract and require the assent of the bailee to make him Deposits. 15 It is a contract so far as it goes. It does not bind the depositary to continue in tlie custody of the goods for an unlimited time ; for he may tender them to the owner, giving him a reasonable opportunity to re- move them, and thus terminate his responsibility.^ The contract of bailment is very often implied by law from the cir- cumstances attending the delivery of the goods. The usual definition assumes that there is a contract, either expressed or implied, in every bailment ; and it is clear that the bailee is held bound to the performance of his duties on the theory of contract. There are cases, however, in which it is at least doubtful whether the bailor assumes any legal obli- gation; e. g., where he loans a chattel gratuitously for an indefinite length of time. His delivery of the property furnishes a valuable consider- ation for the borrower's promise to use and keep it with the greatest care ; but it does not bind the lender. So where a person finds a chattel and takes it into his custody, he assumes the duty of preserving it ; but does the law imply a contract between him and the owner ? It will probably when the owner comes and receives his property, and thus accepts the benefit of the finder's services.^ Where one person receives and uses valuable property of another for a length of time, with the owner's consent, the law presumes a contract of hiring and not a gratuitous loan of the use. And the rule is not dif- ferent where the goods are used by the bailee under the belief that he has acquired the title to them by purchase. A gratuity of considerable value is not to be presumed ; it is to be proved.' There being no spe- cial agreement, the nature of the property, the relation of the parties to each other and the circumstances, will ordinarily decide the question of fact, whether the goods were delivered and used under a contract of hire, or under a gratuitous bailment. § 11. It is to be remembered that only chattels personal or things movable, which are capable of being delivered, can properly be made the subject of a bailment by deposit. These include everything that can be put in motion, and transferred from place to place ; all that great class of property which is termed personal estate because it is supposed responsible. Heatherington v. Eichter, 31 W. Va. 858. In others it is held that the liability of a bailee for hire is founded on contract, while in the case of a bailee with- out reward there is no contract, and the bailee is liable only for wrongful conduct. Schermer v. Neurath, 54 Md. 491. 1 Roulston V. McClelland, 2 E. D. Smith, 60. If the owner after notice neglects to remove the property, the bailee may place it on storage at the bailor' s charge. Dale V. Brinckerhoff, 1 Daly, 45. ^ Sheldon v. Sherman, 42 N. T. 484, and cases there cited. ' Eider v. Union India Eubber Co., 5 Bosw. 85; S. C. 28 IT. T. 379. See Davis v. Gorton, 16 N. T. 255; see also, Culleu v. Lord, 39 Iowa, 302. 16 Law of Bailments. to follow the person. 1 Securities of every kind, promissory notes and bills of exchange, and bonds and mortgages may become the subject of a deposit ; '' and so may also title deeds or any chose in action. But in the usual course of business these securities are not often made the subject of this kind of bailment ; and even where they are deposited, the depositary has generally but a slight control over them. Frequently he has the bare custody of the paper, while the owner retains the legal title to it. E. g., if John Doe, having a draft or note payable to himself or order, delivers it to another person to keep, without indors- ing it, the depositary will have simply the custody of the paper.' So where he delivers without transferring a bond and mortgage, the depositary will not have control of the title.* It follows that the effect of the deposit, as well as the duties incumbent upon the depositary, must depend upon the nature and condition of the security ; in other words, upon the extent to which he is entrusted with the property or charged with its preservation. Should the holder of an indorsed note deliver it to a friend to obtain the money on it when it becomes due, it is doubtless his duty to have it duly protested in case it is not paid at maturity.^ § 12. Where money is paid into court or placed in the hands of an officer under an order of the court, the title to the money is not changed,. ;ai(l the duties of the depositary are not created, nor are they precisely defined as in ordinary cases by contract.^ The depositary voluntarily accepts the ofB.ce held by him, and he receives the money in the due course of his official duty ; he does not act gratuitously ; he is therefore a bailee for hire, and not a mere depositary. His, responsibility for the 1 Because personal property is supposed to follow the person, wills and other dis- positions of it must be made according to the law of the testator' s domicil at the time of his death. Parsons v. Lyman, 20 N. T. 103, 112; Moultrie v. Hunt, 23 N. Y. 394. Money may be the subject of the contract. Dustan v. Hodgen, 38 111. 352. 2 Rutgers v. Lucet, 2 John. Cases, 93. An agent receiving a bill of exchange from another, to be credited to his principal in other transactions, or to be returned, is liable for the amount of the bill where the means of paying it passes through his hands. ^ There can be no question on this point; even in the case of a pledge, the paper should be indorsed in order to transfer it. Nelson y. Wellington, 5 Bosw. 178, 187. * The security may be assigned by parol, but a delivery is not a transfer of the title. Hooker v. Eagle Bank of R. 30 N. Y. 83, 87. ^ It is the duty of a bailee holding the note as collateral security to have it duly pro- tested. Foot V. Brown, 2 McLean, 369; Chitty on Bills, 36.5; Edwards on Bills and Notes, 494, 495. ^ Under the 73d rule of our Supreme Court, the surplus moneys arising on a fore- closure sale must be paid over to the treasurer of the county, to await the further order of the court.. Sei.i Parsons v. Travis, 5 Duer, 050. Deposits. 17 money is at least equal to (and it may be greater than) that of a bailee for a reward.^ When a deposit is made by agreement between parties engaged in litigating the title, the depositary without compensation incurs the usual.liability. His contract is that which he makes it in express terms, or that which the law will imply in the absence of an express agree- ment.^ He is an agent of both parties pending the htigation ; on the termination of the suit, he holds for the owner in the same fiduciary capacity as an ordinary bailee ; * bound to pay over the money or give some reasonable account of it.* Paeties. § 13. All persons except those who are disabled by law, are capable of contracting. At common law, married women, infants, and persons of unsound or deficient mind, are incapable of binding themselves by contract. Let us consider these exceptions separately, since they stand each upon a distinct ground of reason or public policy. 1. Under the common law, except so far as it is modified by statute, the legal existence of the wife is merged in that of her husband, and they become one person in law ; the wife no longer capable of bind- ing hersfelf personally by contract or by covenant. The rule is counted droU and harsh in these modern days, and has gradually yielded to a new theory, under which the doctrine of merger in a marriage is repudiated. The old word coverture must therefore be gradually dismissed. At the same time it is but just to remember that the rule had its affirmative, as well as its negative side. The wife's disability was also her shield.^ 2. Under the earlier enabling acts a married woman might carry on any trade or business on her sole and separate account ; she might sell and convey her separate real and personal property or any part of it, and invest the proceeds in her own name ; and she might bind herself by any contract or covenant of title in reference to her separate real estate, with the same effect as if she were unmarried.'' Applying the same rule of interpretation to the language of the last statute which 1 Muzzy V. Shattuck, 1 Denio, 233; Supervisors of Albany v. Dorr, 25 Wend. 440; S. C. 7 Hill, 583; U. States v. Prescott, 3 How. U. S. K. 578; Aurentz v. Porter, 56 Penn. St. 115; 38 111. 89. 2 La Farge v. Morgan, 11 Martin, 462, 522. ' Burlians v. Casey, 4 Sand. S. C. R. 707. * Parry v. Roberts, 3 Adol. & Ellis, 118; S. C. 30 Eng. C. L. 75. 5 Wilson V. Burr, 25 Wend. 386; Jackson v. Vanderheyden, 17 John. 167. 6 Chap. 90 of Laws of 1860, as amended by Chap. 172 of the Laws of 1862 ; KoUs v. DeLeyer, 41 Barb. 208. 18 Law of Bailments. has been applied to the acts of 1848 and 1849, and it will be found that the law almost, but not quite, removed the married woman's disability to contract.i gj^e could bmd herself by any contract made in the course of her trade or business. ^ She might purchase real estate on credit and take the title in her own name ; » and she might bind herself for improvements thereon.* The rule imder the earlier enabling acts of this State may be stated thus : A married woman might bmd herself by contracts made in her separate business or relating to her separate property ; and such contracts might be enforced in law or equity the same as if she were unmarried. Her other contracts did not bind her personally, but might be enforced m equity against her separate property, provided her intention to change it was stated in the contract.^ The rule was hardly satisfactory ; since a married woman carrying on a trade or business might bind herself personally by contracts of purchase or sale, while a married woman who did not thus engage in trade had no such power. The want of uniformity in the rule evidently was not intended ; it grew out of the settled principle of construction that binds our courts to limit the effect of a statute modifying the common law to the words of the statute.' Various acts have from time to time been passed conferring addi- tional powers upon married women, until all the disabilities of coverture have been swept away. A married woman may now contract with her husband or any other person to the same extent, with like effect, and in the same form as if unmarried, and she and her separate estate will be liable thereon, whether such contract relates to her separate estate or business or otherwise, and in no case is a charge upon her separate estate necessary. But this does not authorize her to enter into any con- tract with her husband by which the marriage relation shall be altered or dissolved, or which will relieve him from his liability for her sup- port.' It will be easy to apply these principles to the contract of deposit. Where the common law remains intact, the married woman cannot render herself liable as a depositary. Receiving goods into her custody without consent of her husband, she does not bind either him or her- 1 White V. McNett, 33 N". T. 371. 2 Owen V. Cawley, 36 N". T. 600; Schmitt v. Costa, 3 Abb. Pr. N. S. 188. 8 Knapp V. Smitb, 27 N. Y. 277; Draper v. Stouvenal, 35 jN". T. .=i07. < Fowler v. Seaman, 40 N. T. 592. 5 Com. Ex. Ins. Co. v. Babcock, 42 N. T. 613. 6 Yale V. Dederer, 18 N". Y. 265; S. C. 22 id. 450; Ballin v. Dillaye, 37 ^". Y. 3.5. ' Chap. 381 of Laws of 1884, as amended by Chap. 594 of Laws of 1892. Deposits. 19 self; but if the goods come into his custody, or if he voluntarily retain them, knowing the purpose for which they were received, he will be responsible for them.* This is on the principle that where the circum- stances call upon him either to adopt or repudiate her act, it is his duty to act promptly.^ Unless he does so, he certainly cannot be in any better position than one who comes into the possession of goods by finding. The wife often acts as the agent of her husband ; but her authority so to act must be shown affirmatively, by direct proof of her authority or by proof of facts and circum.^tances from which it may be inferred.^ It follows that a delivery tu the wife of the bailor is not equivalent to a delivery to him. Where she obtains the goods from a bailee by fraud, an action might formerly be maintained against both husband and wife for the wrong ; but this liabihty would not prevent a recovery by the bailor against the bailee on the contract of bailment.* § 14. Persons of unsound mind and memory cannot enter into a binding contract. There are four kinds of persons whom the law rec- ognizes as non compos mentis, and incapable of contracting : 1. Idiots, who are such from birth by a perpetual infirmity. 2. Those who by sickness, grief, or other accident, wholly lose memory and understand- ing. 3. Lunatics, who sometimes have, and sometimes have not under- standing, and are therefore incapable, so long as the infirmity continues. 4. Lastly, they that for a time deprive themselves by their own vicious acts, of memory and understanding, as they that are drunken.^ None of these, while so aiflicted, have what is termed discourse of reason. An idiot is one who has not any use of reason, has no understanding to tell his age, who is his father or mother, or what shall be for his profit 1 Kowing V. Manly, 49 K. T. 192, and authorities cited in the opinion of the court. 2 Berwick v. Dusenberry, 32 How. Pr. 348. 8 1 Greenl. Ev. § 185; Goodwin v. Kelly, 42 Barb. 194. The consent of the wife to the taking of her husband's property will not prevent a conviction of the wrong-doer for the larceny. The People v. Cole, 43 K. T., 508. * Kowing V. Manly, supra. The common law liability of the husband for his wife's torts rested upon two distinct grounds, viz., 1, his control over her conduct, and 2, his right of property in the goods acquired by her. Eeeves' Domestic Eelations, 71, 148; Mathews v. Fiestel, 2 E. D. Smith, 90; Rowe v. Smith, 45 N. T. 230. In this State a husband is not liable in damages for his wife's wrongful or tortious acts, nor for in- juries to person or property orthe marital relation caused by the acts of his wife unless such acts were done by his actual coercion or instigation; and such coercion or insti- gation must be proved like any other fact. Lasvs of 1890, Chap. 51, § 2. So in this State the husband is not a necessary or proper party to an action or special proceeding to recover damages to the person, estate, or character on account of wrongful acts of his wife committed without his instigation. Code of Civil Procedure, § 450. 5 Stewart v. Lispenard, 26 Wend. 299. 20 Law of Bailments. and loss ; lor he " is not an idiot if lie hath any glimmering of reason, so that he can tell his parents, his age, or the like common matters." ^ Lunatics are such as occasionally labor under fits of insanity, and can enter mto contracts only during lucid intervals. Those who have lost their understanding by calamity, or demented themselves by drunken- ness, are regarded as incapable of discharging the ordinary duties of life. An infant is capable of contracting, but cannot bind himself by con- tract ; that is to say, the law gives him the personal privilege of re- pudiating his contract, while it at the same time holds his agreement a sufficient consideration to sustain undertakings made to and with him. As a rule, his contracts are not void, but merely voidable. Until he repudiates them, they remain good. No other person can take advantage of his privilege ; his promises have not in themselves the essence of a contract, that is obhgation, yet they constitute a valid consideration for a mutual promise by another; and also a sufficient consideration for a new promise by the infant, when he shall be capable of making a binding promise.^ In respect to his contracts which remain wholly executory, no action to enforce them can be maintained against an infant ; and even where his contract has been partly performed, the law allows him the privi- lege of refusing to go on under it."* In short, he cannot be compelled to perform a contract by virtue of anything contamed in the terms of it.* But where he receives and retains the benefits of the contract on coming of age, he cannot escape from its burdens. He is not allowed to affirm it in part, and reject it as to the residue. ^ If he buys and pays for property, neither law nor equity will suffer him to retain the property and recover back the purchase money.^ It is not material here to consider in what cases an infant may bind himself for necessaries and the like ; but it is material to bear in mind 1 1 Black. Comm. 304. 2 Mason v. Denison, 15 Wend. 64; ilillard v. Hewlett, 19 Wend. 301; Slocum v. Hooker, 13 Barb. .530; Beardsley v. Hotchkiss, 90 N". Y. 201; Anderson v. Soward, 40 Ohio St. 325; King v. Jamison, 2 Mo. App. 584. 8 Whitmarsh v. Hall, 3 Denio, 3*75. * Medbury v. Watrous, 7 Hill, 110. 5 Henry v. Eoot, 33 N. Y. 526, 530 ; Lynde v. Budd, 2 Paige Ch. R. 191. ^ Bartliolomew v. Finnemore, 17 Barb. 428; Kitchen v. Lee, 11 Paige Ch. E. 107; Walsh V. Powers, 43 N. Y. 23, 26. An infant who has deposited money with stock- brokers as a margin upon the credit of which he has engaged in a losing speculation in stocks without ever having possession of the stocks may avoid his contract, repudiate his orders, and recover his deposit in full. Mordecai v. Pearl, 63 Hun, 553; Ruchizky v. DeHaven, 97 Pa. St. 202. But see Criunmey v. Mills, 40 Hun, 370. Deposits. 21 that infants are liable for their tortious acts, such as trespass, assault, and fraud, in the same manner as adults. If an infant purchase goods under fraudulent misrepresentations, a recovery may be had against him in an action of trover ;i or he may be indicted and punished for obtaining goods on false pretenses.^ An action on the contract ■will not be supported; * nor can his contract be turned into a tort for the purpose of charging him.* The action, disaffirming the contract, must be founded upon the infant's tortious act ; because the law does not hold him liable on the contract, even where it is infected with fraud.^ An infant may avoid his contract at any time before and within a reasonable time after he comes of age." If he hire a horse to go a journey, he engages to use ordinary care and diligence to protect the animal from injury, and to return him at the time agreed upon. A bare neglect to do either will not render him liable on his contract, nor subject him to an action of trespass.' But if he does any willful and positive act which amounts to a disaffirmance of the contract, the owner is entitled to the immediate possession and may maintain an action of trespass against him.* Though no action can be maintained against the infant based on the contract, it is admitted that an action of trover may be maintained against him for a conversion of the property.' The act of conversion by sale, or by appropriating the property to his own use, is a tortious act. A failure by him to pay over money, received by him for a third person, where by the understanding he is not bound to pay over the same money, is not a conversion. It is a breach of contract." 1 Bullock Y. Babcock, 3 Wend. 391. In this case an infant of twelve years was adjudged liable in an action of trespass, assault, and battery, viz. , for shooting the plaintiff, his playfellow, with a bow and arrow. See Conklin v. Thompson, 29 Barb. 18; Scott V. Watson, 46 Me. 362. And in Wallace v. Morse, 5 Hill, 391, an action of tort was maintained against the defendant for obtaining goods of the plaintiff fraudulently, with an intention not to pay for them. See also Badger v. Phinney, 15 Mass. 359 ; Homer v. Thwing, 3 Pick. 492; and cases cited in Eckstein v. Frank, 1 Daly, 334. 2 The People v. Kendall, 25 Wend. 399. 8 Brown v. McCune, 5 Sand. 224. * Eobbins.v. Motint, 4 Kobertson, 553, 560; Munger v. Hess, 28 Barb. 75. 6 Green v. Greenbank, 2 Marshall, 485; Price v. Hewitt, 8 Wels. Hurl. & Gor. 146; <3ilson V. Spear, 38 Vt. 311; Hewitt v. Warren, 10 Hun, 560. 6 Chapin v. Shafer, 49 N. T. 407. '' Eaton V. Hill, 50 N. H. 235; Moore v. Eastman, 1 Hun, 578. 8 Campbell v. Stakes, 2 Wend. 137. In this case it was held, that the infant dis- affirmed the contract by willfully and intentionally injuring the hired horse. ^ Yasse v. Smith, 6 Cranch, 226, 230; Baxter v. Bush, 29 Vt. 465. 10 Boot V. Stevenson, 24 Ind. 115. Walsh v. Powers, 43 N. T. 23; was decided oa same principle. 22 Law of Bailments. As the infant may make, though he cannot bind himself by, a con- tract, the law will probably imply an undertaking on his part safely to keep and return goods bailed to him, from the circumstances attending the delivery. If he repudiate this implied contract, he certainly cannot afterwards claim to hold the goods under it or to shield himself from liability by appealing to it. Hence he is liable for any positive and tortious injury to the goods, for a conversion of them, or for any act of fraud by which he deprives the owner of his property.^ A refusal to surrender the goods, or a misappropriation of them is a wrongful act, from the consequences of which the law will not protect him. The invalidity of the contract does not afiEect the liability of a party for a conversion of the property.^ § 15. The presumption is always that the person entering into a con- tract is of sound mind and capable of contracting. The disability must be established by evidence ; it is treated as an exception to the general rule, to be established by the party alleging the disability.^ What is unsoundness of mind, such as will render a man incompetent to bind himself by contract? It is not easy to give a precise answer; but it is safe to say that the free consent of a rational mind is neces- sary to create a contract ; a rule which is easily capable of being enforced in respect to all executory contracts,* and in cases where no equity re- quires a partial or complete enforcement of the agreement.^ In strict law, the want of understanding prevents the meeting of minds which is essential to the creation of a binding contract. In many cases the 1 The principles recognized in analogous cases fully support the text. Marshall v. Wing, 50 Maine, 02. He is liable for a trespass though under seven years of age. Hutching v. Engel, 17 Wis. 230; Baxter v. Bush, 29 Vt. 405. He is even liable on his note, given in a settlement with the mother of his bastard child. Gavin v. Burton, 8 Ind. 69. 2 Hall V. Corcoran, 107 Mass. 251. In this case the hirer of a horse to be driven for pleasure on the Lord's day, was held liable for a conversion of the property notwith- standing the contract was illegal. The horse was let to go to a particular place, and the act of conversion consisted in injuring the horse by driving it to another place. A person who has become the bailee of goods through a contract entered into with the agent of an undisclosed principal cannot rescind the contract on account of the minority of the bailor, without delivering the goods to him, even if the contract is voidable. Stiff v. Keith, 143 Mass. 224. 8 Jackson V. King, 4 Cowen, 207; Fay v. Burditt, 81 Ind. 433; McCarty v. Kearnan, 86 111. 291. * Eice V. Peet, 12 John. 503. This was the case of a note held and delivered by an incompetent party under a contract. 5 Ingraham v. Baldwin, 12 Barb. 9; S. C. 9 N. T. 45. In this case the defense of lunacy was offered after a mortgage had been foreclosed and the premises sold; and the court held that no one could interpose the defence unless he claimed under the mortgagor. Deposits. 23 situation of a lunatic or deranged person is like that of an infant; though incapable of binding himself, he will not be suffered to retain the consideration of an executed contract and at the same time set it aside. This is especially reasonable where the party dealing with him acts fairly and in good faith, and without any knowledge of his infirmity.^ Mere imbecility or weakness of mind, short of idiocy or derangement, or loss of mind, does not take away a man's capacity to contract.^ The rule is one of necessity ; it is founded on the extreme difficulty of prescribing any other rule defining the strength of mind requisite for the transaction of business. To say that a man of very weak mind cannot bind himself by contract, would raise endless issues of fact and practically take away from such persons the means of self-support.' Certain rules of evidence favor the impression that the law requires a higher degree of capacity to bind one's self by contract than it does to make a valid disposition of property by wUl. For example, all transfers of property and all contracts made by a lunatic or by a con- firmed inebriate after the finding of an inquisition declaring his incom- petency are void : * but the inquisition is not conclusive evidence of his incapacity to make a will.* The courts give effect to the inquisition ■f with a view to accomplish the intent (Tf the statute ; so that the rule of 1 Loomis V. Spencer, 2 Paige's Ch. 153; Molton v. Camroux, 4 Exch. 17; S. C. 2 Exch. 487; Baxter v. Earl of Portsmouth, 5 B. & C. 170; 7 Dow. & By. 614. A con- tract with a person not known to be of unsound mind, and who has not been found upon a commission de lunatico inquirendo to be insane, may he sustained if it shall have been proven to have been fairly made and without advantage being taken of the lunatic. But neither money advanced, nor compensation for services rendered, to a lunatic can be recovered from him, if the circumstances were such as to put the party upon inquiry as to his mental condition. Matter of Beckwith, 3 Hun, 443; Lincoln V. Buckmaster, 32 Vt. 52; Mutual Life Ins. Co. v. Hunt, 14 Hun, 169; 79 iST. T. 541: Matthiessen & W. E. Co. v. McMahon, 38 N. J. L. 537; Lancaster County Bank v. Moore, 78 Pa. St. 407; Behrens v. McKenzie, 23 Iowa, 333; Wilder v. Weakley, 34 Ind. 181. 2 Odell V. Buck, 21 Wend. 142; Jackson v. King, 4 Cowen, 207. Second childhood; Matter of Barker, 2 John. Ch. 232. Monomania connected with the disposition or management of property ; Matter of Kussell, 1 Barb. Ch. 38. Imbecility from epilepsy ; Ridgway v. Darwm, 8 Ves. 65. 3 Sprague v. Duel, Clarke, 90; S. C. 11 Paige Ch. 480. * L'Amoureux v. Crosby, 2 Paige's Ch. K. 422; Wadsworth v. Sharpsteen, 8 N. Y. 388; Leonard V. Leonard, 14 Pick. 280; Carter v. Beckwith, 128 N. Y. 312; Hughes V. Jones, 116 N . T. 67. Contracts made before oflSce found, but within a period overreached by the finding of the jury, are not utterly void, but are presumed to be so until capacity to contract is shown by satisfactory evidence. Hughes v. Jones, 116 N. T. 67; Van Deusen v. Sweet, 51 N. Y. 378; Banker v. Banker, 63 N". Y. 409. 5 Leonard v. Leonard, 14 Pick. 284; Breed v. Pratt, 18 Pick. 116. 24 Law of Bailments. evidence annulling such subsequent contracts springs from the spirit of the statute. The presumption of a want of capacity to make a will, arising from the fact that a man is under the guardianship of the court, remains ; and it is perhaps overcome where the court modifies the com- mission for the purpose of enabling him to execute a will.^ In truth, the rule of law does not vary with reference to the subject matter of the transaction. A person of unsound mind can neither bind himself by contract, nor make a wUl. Our law does not distinguish between different degrees of intelligence or mental capacity. By the statute a man of sound mind and memory may dispose of his property by will ; ^ he has a sound mind when he is able to comprehend the sit- uation of his property, his natural relations, and the nature of his act ; he has a sound memory when he is able to collect in his mind, without prompting, the elements of the business to be transacted, and form some rational judgment in relation to them.'' § 16. A man who is so intoxicated that he is deprived of the use of his reason and understanding, cannot bind himself by contract ; he has no legal capacity.^ Partial intoxication, where there is no fraud or undue influence practiced, does not render him incompetent ; he may make a contract or a will unless he be s^ar under the influence of intoxicating liquor as to disorder his faculties and pervert his judgment.^ Where a person takes advantage of an intoxicated man and obtains a contract from him by artful and fraudulent dealing, a court of equity wUl grant relief; and a defense may be interposed m an action at law, grounded on the fraud.* By retaining the benefits arising from the contract, as where a drunken man purchases goods and keeps them after he becomes sober, he renders himself liable on the contract. § 17. When goods come into the possession of one who has no capac- ity to contract, it has been argued that the law will raise or imply a duty or contract from the circumstances.' Without attempting to 1 In the Matter of Burr, 2 Barb. Ch. R. 208; in the Matter of Patterson, 4 How. Pr. 34; Lewis v. Jones, 50 Barb. 653. 2 Blanchard v. Nestle, 3 Denio, 37; Stewart's Exr. v. Lispenard, 26 Wend. 255. s Delafield v. Parish, 25 N. T. 9, 66, 97; Van Guysling v. Van Kuren, 3.5 N". T. 70; Clapp V. Fullerton, 34 N. T. 190; Tyler v. Gardner, 35 N. Y. 559; Bannister v. Jackson, 46 N. J. Eq. 59.3; Clifton v. Clifton, 47 N. J. Eq. 227. What is derangement? SeeHaviland v. Hayes, 37 N. Y. 25; and Seaman's Friend Society v. Hopper, 33 K. Y. 610. ^ Gore V. Gibson, 13 Mees. & Wels. 623; Prentice v. Achone, 2 Paige, 30. s Peck V. Gary, 27 N. Y. 9, 20; Burns v. O'Eourke, 5 Robt. 649. " Hutchinson v. Brown, Clarke's Ch. E. 408, 420; Dane v. Kirkwell, 8 C. & P. 679. The contract of a drunken man is voidable; it is not void. Mathews v. Baxter, L. K. 8 Ex. 133; Carpenter v. Eodgers, 61 Mich. 384. 'Per Pollock, C. B. 13 Mees. & Wels. 625. Deposits. 25 resolve this point, we may reasonably assume that the law will deal with him as it does in the case of an executed contract ; it will not suffer him to interpose his disability as a cloak for misconduct. If he repudiates the implied contract ordinarily raised by law, the owner may at once recover his goods ; the right of possession follows the title, and where the custody of the property has been parted with through mis- apprehension, it may be retaken. A lunatic, though incapable of committing the moral wrong of tres- pass, is nevertheless answerable in his estate for the injury he com- mits.^ Under the statute which gives damages recoverable in the name of the executor or administrator of the deceased, for the destruction of life through carelessness or by any wrongful act, a lunatic has been held responsible. The decision was made at a General Term of the Supreme Court at Albany, and is supported by many other cases ad- judged upon the same principle. The law in such cases demands of the lunatic? only the actual damages, to be satisfied out of his estate.^ On the same principle, an insane man is liable for his wrongful and tortious acts of injury to the property of other persons. He is liable like an infant.' § 18. The Finder. The finder of personal property is not compelled / by law to take the same into his custody ; but if he voluntarily assume the charge of it, the law imposes upon him the duties of a depositary.^ The action of trover, so long in use, was designed expressly for the re- covery of property by the owner from the custody of the person, intft whose hands it may have lawfully come, as by finding, the important fact in the case being the act of conversion ; that is, the exercise of some act of ownership or control over the property in exclusion of the legal owner. In that form of suit, in general, only the two questions of title and conversion are litigated. A careful examination, however, of the decisions in the action of trover will show that the_flnderjsj_and \ upon principle ought to be, held responsible for the care of the goods so I received . The law, in fact, gives him a special property in them, and he may maintain a suit against any one who shall convert them except 1 Morse v. Crawford, lY Vt. 499; held liable in trover for strangling an ox bailed to him. ^ Mull V. Kelly, also Krone v. Schoonmaker, 3 Barb. 647. See Session Laws of 1847, ch. 450; also Laws of 1849, ch. 256. 'Weaver v. Ward, Hob. 134; Cross v. Andrews, Cro. Eliz. 622. See Bush v. Pettibone, 4 N". T. 300. Morain v. Devlin, 132 Mass. 87; Cross v. Kent, 32 Md. 581; Ward V. Conastar, 4 Baxt. 64; Mclntyre v. Sholty, 121 111. 660. * Story on Bailm. § 86, 87; Cory v. Little, 6 ST. Hamp. 213. 26 Law of Bailments. the rightful owner ; ' having the right and the means ot protecting the property, it is but reasonable that he should be required faithfully to exercise and use them. / Where a right is conferred, it is a general principle of both law and equity, that the person or party in whom it is vested shall be required to exercise it in good faith, so as to carry out the purpose for which it is given. " The action of trover, which always assumes that the property in question came lawfully into the defendant's possession, was frequently brought and sustained for the injury suffered by the misuse, or dis- position of it contrary to orders. Every direct act of authority, amount- ing to an assertion of title, every breach of the express or implied trust on which it was received, and every abuse of the lawful possession, has been repeatedly held a conversion of the property.^ These familiar principles are applicable both to chattels and to choses in action.^ § 19. The finder is in lawful possession against all the world except the owner ; he has what the law treats as a special property in the chattel, a title or interest suflQcient to enable him to maintain the action of trover against any stranger or third person who takes or detains it from him.^ The rule does not apply to the finder of a chose in action ; " a mere servant of the owner has no such interest or special property in the goods entrusted to him.' He is not clothed with the rights of a bailee or fuider of chattels. § 20. Xot being legally bound to assume the custody of lost goods or chattels, the question often arises whether the finder is entitled to compensation for his services and expenses when he does take them into his keeping. The rule as usually stated is, that one who takes up an estray or any other lost chattel cannot levy a tax upon it by way of reward or indemnity.' He certainly does not acquire any lien upon it for his services or expenses in taking care of the property. In most 1 McLaughlin v. Waite, 9 Cowen, 670; Hamakerv. Blancliard, 00 Pa. St. 377; Tancil V. Seaton, 28 Gratt. 001; Lawrence>. Buck, 02 :sie. 275; Durfee v. Jones, 11 R. I. 588. 2 The Mayor, &c., of Xew York v. Furze, 3 Hill, 612. 3 Baldwin v. Cole, 6 Mod. 212; McCombie v. Davies, 6 East, 540'; Roe v. Campbell, 40 Hun, 4! I; McPheters v. Page, 82 Me. 2:34. * Murray v. Burling, 10 John. R. 172; 2 Esp. N". P. 190; Edwards on Bills and Xotc^s, 2nd ed., 679 a. 6 Amory v. Delamirie, 1 Strange, 505. The plaintiff, who was a chimney sweeper's boy, found a jewel, and having left it with the defendant, who refused to return it, an action of trover was sustained in favor of the finder. 8 McLaughlin v. Waite, 9 Cowen, 670. ' Tuthill V. Wheeler, 6 Barb. 362, 364. Where a man bargains for property and the title is to vest in him when he pays for it, he cannot bring trover for it against an officer who levies on it as the seller's property until he has paid for it. 8 1 Roll. Abr. 870, C. 5; SToy's Rep. 144; Salk. 686; Watts v. Ward, 1 Oregon, 86. Deposits. 27 cases it must be admitted that he performs a meritorious act ; but it is a voluntary act of charity or good will; and it is the policy of the law to leave good offices and meritorious acts of benevolence dependent for reward upon the moral duty of gratitude. Hence the law gives no recovery for voluntary services in preserving a neighbor's property from loss by fire or flood.^ But suppose a chattel is taken up and pre- served by the finder at some expense of both time and money, and that the owner afterwards comes and receives it, thereby accepting the benefit of the expenses thus incurred ; does the law hold the owner liable for these reasonable expenses? If he choose to abandon his property, it is clear that he is not liable ; because the expense was not iucurred at his request. But if he accepts the property, preserved and restored to him by these reasonable expenses, he is bound, we think, to reimburse the finder.^ It is remarkable that a question of so much practical importance should have remained so unsettled. A reward being offered to the finder of lost goods or chattels, any one may act upon it and may claim the compensation as a matter of con- tract ; and where by its terms, or by a fair interpretation of the offer, the reward is to be paid on restoring the property, the finder may de- tain it until the reward is paid.' Under a statute of this State a person finding horses, cattle or sheep upon his enclosed lands may acquire a lien upon them for his reason- able charges for keeping them, in the manner pointed out in the act. But he cannot do so unless he follows the provisions of the statute.* 1 Nicholson V. Chapman, 2 H. Black. 254; Bartholomew v. Jackson, 20 .John. E., 28; Watts v. Ward, 1 Oregon, 86; Binstead v. Buck, 2 W. Blackstone, 1117. 2 Reeder v. Anderson, 4 Dana, 193; Etter v. Edwards, 4 Watts, 63; Amory v. Flyn, 10 John. R. 102; Preston v. Neale, 12 Gray, 222, 223; Chase v. Corcoran, 106 Mass. 286. Sheldon v. Sherman, 42 Barb. 368; S. C. 42 N. T. 484. This case justifies the inference that where the owner comes and takes his property benefited by the services of the finder, the law will imply a promise to pay for such services. When is a thing to be considered as lost? Money or chattels, voluntarily laid down and forgotten, are not considered lost in a legal sense, and so it is held that the proprietor of the store, or bank, or place where they are left, is the proper custodian, rather than the party who first discovers them. State v. McCann, 19 Mo. 249; Lawrence v. The State, 1 Humph. 228; McAvoy v. Medina, 11 Allen, 549; Kincaid v. Eaton, 98 Mass. 139; Livermore v. White, 74 Me. 452. The rule does not hold where a conductor finds money in a railroad car, and the owner cannot be found. Tatum v. Sharpless, 6 Phila. 18; N". T. and Harlem R. Co. v. Haws, 56 N". T. 175. Or where the bailee of an old safe finds within its lining a roll of bank bills, and the owner cannot be found. Dur- fee V. Jones, 11 E. I. 588; Bridges v. Hawkes worth, 7 Eng. Law & Eq. 424. 8 Wentworth v. Day, 3 Mete. 352; Neville v. Kelly, 12 C. B. N. S. 740; Baker v. Hoag, 7 Barb. 113; S. C. 7 N. Y. 555. ^ Laws of 1890, Chap. 569, § 120. 28 Law of Bailments. § 21. The finder of a lost article, who takes it into his custody in good faith, not knowing who the owner is, is not rendered guilty of lar- ceny by afterwards secreting and appropriating it to his own use. The taking must be felonious in order to make the act a felony ; the taking must be a trespass ; ^ and it must be with an intent to steal, animo furandi.^ The discrimination between the act of taking up a lost pocket-book containing money with an intent to appropriate it, and the act of taking it up and presently concealing it with the same intent, is clearly made ; the distinction is indeed nicely drawn, to a rather thin edge ; and yet it must be admitted that the crime of larceny is plainly distinguishable from the fraudulent concealment and conversion of property that comes lawfully into a man's possession. The finder of a pocket-book containing bank bills and having the owner's name legibly written in it is a thief, if he conceals and appropriates the money.' It is not necessary that he should have lifted it from the ground with a thievish intent.* On the other hand, he is held not guilty of felony, where he takes up the book with the money in it, without finding any mark or name in it to indicate the owner, and afterwards fraudulently conceals the same with a view to convert it to his own use.^ It is his duty to take means to find the owner and restore the property ; but the law does not punish him as a thief for his failure to fulfill this obligation. § 22. Under the old common law, where a ship was lost at sea and the goods or cargo were thrown upon the land, the property was ad- judged to the king. The law was afterwards modified under a growing sense of justice, and it was made the duty of the sheriff to seize and keep the property for a year and a day, to await the appearance of the owner. But the goods were not deemed a legal wreck unless they 1 The People v. Anderson, 14 John. 294. The indictment was for the larceny of a trunk, lost from a stage coach. 2 The People v. McGarren, 17 Wend. 459; The State v. Weston, 9 Conn. R. 527; Wilson V. The People, 39 N". T. 4.59. " The State v. Weston, supra; People v. Swan, 1 Park. Cr. R. 9. The Penal Code provides that a person who finds lost property under circumstances which give him knowledge or means of inquiry as to the true owner, and who appro- priates such property to his own use or to the use of another person who is not en- titled thereto, without having first made every reasonahle effort to find the owner and restore the property to him, is guilty of larceny. Penal Code, § 539. * The People v. Call, 1 Denio, 120. In this case the defendant was convicted of the larceny of a promissory note; the note was handed to him to write an indorsement upon it, and he carried it away feloniously. Stealing a receipt is not larceny. The People v. Loomis, 4 Denio, 380. See Florence Sewing Machine Co. v. Warford, 1 Sweeney, 433, 448. 6 The People V. Cogdell, 1 Hill, 94; State v. McCann, 19 Mo. 249. Deposits. 29 came to land.* Under a statute of this State, ships and goods cast upon the land from the sea are taken care of and secured on hehalf of the owner, in the name of the people. Unless the property be of a perish- able nature, it is made the duty of the sheriff to keep the same for a year ; and if no one appear to claim it within that time, it then becomes his duty to sell the property and pay over the proceeds into the treas- ury of the State, for the benefit of the parties interested. In the case of perishable property, the county judge may at once order it sold and the proceeds retained for the owner.^ Under this statute the officer is entitled to a reasonable allowance for his services as salvage, and may detain the property until the same, together with his expenses, are paid. The statute applies only where the property is thrown upon the shore; and though the officer's services are compensated under the name of salvage, they are utterly dififerent and distinct from the serv- ices rendered in the saving of a vessel or goods from loss while at sea either by shipwreck, fire or other distress. § 23. Salvage is a term of the maritime law ; it is the reasonable compensation which that law gives to the salvor, to one who renders effectual services upon the high seas or on the sea-coast, or anywhere within admiralty and maritime jurisdiction, in saving a ship or cargo from impending perils or in recovering them from actual loss; whether such services be rendered in recapturing the vessel, or in recovering it when found derelict at sea, or in raising it, or in taking charge of it with the assent of the master while in distress. The raising of a boat and the saving of its cargo from the river, where the tide ebbs and !tiows, gives a title to salvage.' It is a pecularity of this right to salvage, that it accrues only where the property is ia fact saved ; and the amount to be allowed is estimated with reference to the extent of the services and the danger incurred, the value of the property saved and the perils from which it has been rescued.* When it accrues, it attaches as a hen upon the property.^ It is a general rule founded on motives of public policy that no one on board the vessel can become a salvor or entitled to compensation in the nature of salvage ; because it is the duty of all on board to stand by the ship and assist it through all perils. A partial exception to the rule is allowed in favor of the seamen ; when they render valuable serv- ices in saving portions of the vessel and cargo they are entitled to 1 1 Black. Com. 290-294. 2 Laws of 1890, Chap. 569, §§ 137-150. 8 Baker v. Hoag, 7 N. Y. 3 Seld. 535; 3 Kent's Com. 245. * Clarke v. The Brig Dodge Healy, 4 Wash. C. C. 651 ; 3 Kent's Com. 245. s Hartford v. Jones, 1 Ld. Eaym. 393; Hand v. The Elvira, Gilpin, 60. 30 Law of Bailments. wages, though not due by the terms of their contract, from the proceeds of the property saved. ^ § 24. The Consideration. In every contract there must be a valid consideration on wliich the express or implied undertaking rests, as upon a necessary support ; a naked promise being in itself simply void, nudum pactum. The general rule is that to make a contract or agree- ment obligatory, the consideration must be either a benefit to the party promising, or some trouble or prejudice to the party to whom the prom- ise is made; otherwise there is no agreement that can be enforced. Thus, for example, mutual promises support each other, the receipt of money for the use of another raises and supports the promise to pay it over, and services performed render good the promise of payment there- for.^ The act of entrusting a thing with another, and his undertaking the care of it, the law considers a sufficient consideration for his faith- ful discharge of the trust. The custody of the property is parted with on the faith of the owner in the integrity and care of the person to whom it is delivered ; and though he engages to keep it gratuitously he is responsible for a faithful execution of the trust reposed in him, on the ground that his failure to keep the promise made, or the undertak- ing implied by law, works an injury or prejudice to the party with whom the agreement is made. The maxim e.i- mtdo jyacto nan oritur actio, borrowed from the civil law, does not apply in this case ; for there is an act, promise or undertaking, by each of the parties to the contract, sufficient to render it valid and binding. § 2.5. /Sheriff's and Receiptors. A sheriff levying upon goods must use due diligence to keep them safely to satisfy the execution. But he is not an insurer, and is not, like a common carrier, answerable for a loss of the goods by fire, or by accidents of a similar kmd. His capac- ity as an officer is not considered as fixing a more rigorous measure of liability upon him than if he were a private person. He is answerable as a bailee for hire; and is bound for the use of ordinary care and skill in preserving the goods which he seizes rmder an attachment or levies upon under an execution. The rule is the same whether he takes the goods into his own custody or delivers them into the hands of an agent 1 Daniels v. The Atlantic M. Ins. Co., 24 N. T. 447. Salvage is allowed and divided among the owners, officers and crew of the saving ship. Hawkins v. Avery, 32 Barb. 5.51, 556. » 1 Comyn on Con. 12, 15, 16; Chitty on Contracts, 26, 27; 7 Conn. R. 57; 9 Cowen R. 778; 4 John. R. 235; 2 Black. Comm. 444, 445; Miller v. Drake, 1 Caines, 45; Powell V. Brown, 3 John. R. 100; Foster v. Fuller, 6 Mass. R. 58; Randle v. Harris, 6 Terger E. 508; Missisquoi Bank v. Sabin, 48 Vt. 239; Buckingham v. Ludlum, 40 N. J. Eq. 422; Jones v. Binford, 74 Me. 439. Deposits. 31 or servant.^ And it applies equally to other officers who receive a com- pensation for their services.^ § 26. Is the sheriff liable for the goods when they are stolen ? It is quite clear that he is not where he holds them under mesne process, as under an attachment to await the judgment of the court, and it appears that he has taken such reasonable care of the property as a prudent man usually takes of his own.^ He is bomid to show that he has taken due care of the property * — such care as the nature of the goods and the circumstances reasonably call for.^ Is the sheriff liable for any greater degree of care where he levies upon goods under an execution ? It has been so held, upon the theory that he ought to act with greater vigilance in the execution of final process.' There does not appear to be any good reason for the distinction ; the general title does not pass by a levy under an execution, any more than it does by a seizure under an attachment ;'' in both cases the officer acts under the command of the court, and becomes liable for the safe-keeping of the property ; in one case he keeps it to await the judgment and execution, and in the other *o await the sale. The only discoverable difference between the two situations is found in the probable length of time during which he may have to hold the goods in custody — a circumstance hardly sufficient to lay the foundation for a different rule of liability. § 27. There are some dangers, against which the sheriff is bound to guard the goods in a special manner. He is bound to guard them against waste or removal by the defendant. He is armed with peculiar powers, and his duties are clearly defined.' He makes a levy upon 1 Browning v. Hanford, 5 Hill, 588; S. C. Y Hill, 120; S. C. 5 Denio, 586; Moore v. Westervelt, 21 N. Y. 103; S. C. 27 N. Y. 234; Wood v. Bodine, 82 Hun, 354, 356. The sheriff need not at once remove heavy and cumbersome articles, say 50 tons of pig Iron; Scovill v. Root, 10 Allen, Mass. 414; or a load of coal in a barge; Moore v. Westervelt, 21 N". Y. 103. 2 The rule was applied to a country treasurer In Supervisors of Albany Co. v. Dorr, 25 Wend. ^0; in the case of a receiver, in Knight v. Plymouth, 3 Atk. 480 ; and it has been applied in the case of revenue officers and postmasters ; Burke v. Trevitt, 1 Mason, 96, 101. 3 Dorman v. Kane, 5 Allen, Mass. 38; Harper v. Moffit, 11 Iowa, 527. * Mill V. Gilbreth, 47 Maine, 320. ^ Briggs V. Taylor, 35 Vt. 57, 67. Attaching grain in the straw, he is bound to thrash it when that is necessary to preserve it. He is not liable for the natural dete- rioration of the property — such as spirituous liquors. Robinson v. Barrows, 48 Maine, 186. * Hartleib v. McLane's Admrs., 44 Penn. St. K. 510. ' Green v. Burke, 23 Wend. 490, 496-502; Peck v. Tiffany, 2 If. Y. 451, 456. The levy does not satisfy the execution. See Smith v. Orser, 42 N. Y. 132. * § 1702 of the Code of Civil Procedure provides how property shall be kept that has been replevied. 32 Law of Bailments. them in the manner pointed out by the law ; ^ he takes them into his own custody ; or failing to do so, he is liable for them to the same extent as if he had taken them into his own keeping.^ He is also bound to keep the property with a care and skill proportioned to its nature and circumstances. In other words, the rule must be interpreted with reference to the nature and situation of the property and the speciflc duties imposed upon the oflELcer by law. On this account we find in a leading case the same charge to the jury interpreted by different judges who adopt it, as laying down a different rule of liability ; ^ at the same time both agree that the sheriff is not bound to any greater vigilance than a prudent man exercises over his own property.^ § 28. After the sheriff has seized the goods under an attachment or made a levy upon them, it is not unusual for him to leave them in the custody of the defendant or deliver them to a third person and take his receipt therefor with a promise to redeliver them when called for. The officer does this upon his own responsibility ; the law permits but does not expressly authorize the act ; it enforces the receiptor's contract, but refuses to accept or substitute it in the place of the sheriff's UabUity.- The party so receiving and promising to deliver the property to the sheriff, without compensation, is a mere depositary; prima facie he is only liable to the same extent as a bailee without hire. ^ He is liable, however, according to the terms of his contract " — to the full extent of his engagement, even where he covenants to return the property or pay the amount due on the execution.' The receiptor, as we said, is bound by the terms of his contract. If he promise to deliver the goods to the sheriff when called for, no suit can be maintained against him until after a demand and refusal to de- 1 Glover v. Whittenhall, 6 Hill, 597. 2 See opinions in Browning v. Hanford, 5 Denio, 586; although the point in issue was one of evidence merely. See Jenner v. Joliffe, 6 .John. 9. 8 Moore v. Westei-velt, 27 N. Y. 234. The sheriff had attached a cargo of coal on hoard a schooner. The schooner having sunk in a storm at the wharf, the sheriff was sued for the loss ; and the judge at circuit charged the juiy that, "it was the duty of the sheriff to take such steps for the safety of the coal as a careful, prudent man of good sense and judgment, well acquainted with the condition of the vessel and her location with regard to exposure to storms, and having all the power of the sheriff in the matter, might reasonably have been expected to take, had the coal belonged to himself." Mr. Justice Balcom understood this as laying down the rule of ordinary diligence ; Mr. Justice Davies interpreted it as laying down a more strict rule; and both agreed in holding it sufficiently favorable to the plaintiff. * See further, Kendall v. Morse, 43 N". H. 55.3; White v. Madison, 20 J^". Y. 117, 126. 5 Brown v. Cook, 9 John. 361 ; Edson v. Weston, 7 Cowen, 278. « Cornell v. Dakin, 38 N". Y. 253. ' Acker v. Burrell, 21 Wend. 605, 607; S. C. 23 Id. 606. Deposits. 33 liver ; until a demand is made no action can arise, for that is parcel of the contract.^ § 29. The receiptor is also bound by the statement of fact contained in the receipt given by him. If that state the value or the ownership of the property, in word or by implication, he will be estopped from deny- ing it.^ And because he is thus estopped, the sheriff is also when called upon for the proceeds of the property.* This doctrine of estoppel is founded on a principle of ethics. The rule of law and the reason of it are stated thus : Where a man by his words or conduct causes another to assume or believe the existence of a certain state of facts, and induces him to act on that belief, so as to alter his previous position, the former is concluded from averring against the latter a different state of thiags as existing at the same time.^ Hence the receiptor who accepts the goods from the sheriff as the property of the defendant in the execution, promising to redeliver them, cannot afterwards set up title in himself. His contract as receiptor precludes him from making that defense. By omitting to assert his right of property at the time the levy is made, he throws the sheriff off his guard and perhaps prevents him from levying upon other property to satisfy the execution. He certainly induces that officer to change his previous position.^ 1 Brown v. Cook, 9 Jolin. K. 361. ^Dezell V. Odell, 3 Hill, 215; Penobscot Boom Co. v. Wilklns, 27 Maine, 345; Clark T. Gaylord, 24 Ct. 484; Cornell v. Dakin, 38 N. Y. 253. s The People v. Keeder, 25 N. T. 302. < Pickard v. Sears, 6 Adolph. & Ellis, 469; Thompson v. Blanchard, 4 N. T. 303, 309. It is not necessary to an equitable estoppel that the party should have designed to mislead. Manuf. & Traders' Bank v. Hazard, 30 N. T. 226, 230; Sammis v. Mc- Laughlin, 35 N. Y. 647, 651; Gilbert v. Groff, 28 Hun, 50; Blair v. Wait, 69 X. Y. 113; Trustees, etc, v. Smith, 118 N. Y. 634; Continental Nat. Bank v. Nat. Bank of Com- monwealth, 50 N. Y. 575; Beebe v. Wilkinson, 30 Minn. 548; Pitcher v. Dove, 99 Ind. 175. 6 Dezell V. Odell, 3 Hill, 216; Bursley v. Hamilton, 15 Pick. 40. But see Clark v. Weaver, 17 Hun, 481. It has been held that a person can defend against his receipt for his own property attached on a writ against a corporation having no corporate ex- istence. Halbert v. Soule, 57 Vt. 358. He is only liable to the officer so long as the officer is liable to the attaching creditor or the debtor. Eoberts v. Carpenter, 53 Vt. 678. He is not absolutely liable to redeliver attached property. He is a mere bailee of the attaching officer, who can enforce the promise of his bailee to deliver the goods only so far as is necessary to relieve himself from liability to any party interested in the attachment. Wright v. Dawson, 147 Mass. 384. But the receiptor cannot defend upon the ground that the judgment in the action in which the property was attached was fraudulently obtained; Holcomb v. C. N. Nelson Lumber Co., 39 Minn. 342; Bangs v. Beacham, 68 Me. 425 ; nor upon the ground that the officer at- tached property of greater value than directed by the writ; Hunter v. Peaks, 74 Me. 363; nor because of irregularities in the commencement of the action in no way prej- udicing the receiptor; Stevens v. Bailey, 5S N. H. 564. o 34 Law of Bailivlbnts. § 30. Neither is the receiptor at liberty to set up title in a third person. By acceptuig the proJDerty and promising to redeliver it, he makes himself the sheriff's bailee, and in that capacity he is not allowed to dispute the bailor's title. This is the general rule ; and the excep- tions to it show how strictly it is enforced. If the property be taken from him by a paramount title, he is discharged.^ But if he set up title in another person as an excuse for not surrendering the property, he makes himself a party to the controversy and must stand or fall by the title which he asserts.^ To escape the burden of the suit, where the property is taken from him by due legal process, he must give the sheriff immediate notice of the proceedings. If he discharges his duty in this respect, there is no reason for holding him bound to defend the title.^ § 31. Whatever may be the rule of liability applicable to the sheriff, the receiptor i-eceivuig no compensation for the keeping or storage of the goods, is liable for them as a depositary or bailee without hire. It is clear that his liability cannot extend beyond that of the officer ; and it is equally clear that upon principle his responsibility cannot beheld exactly commensurate with the sheriff's liability over to the plaintiff in the execution.* He is however bound to take reasonable care of the property under the circumstances. If he give the sheriff his receipt for a store of goods levied on by him, and allows the defendant in the execu- tion to go on and sell them out at retail, he is answerable for the goods. Leaving them under such circumstances to be wasted or sold, is gross negligence.^ Even where the goods are sold by weight and have a fixed market value, anthracite coal for example, the receiptor is bound to keep and return the very article which he receives ; he is not allowed to sell or consume it and then replace it with the same amount and kind of coal.'' § 32. A reasonable use of the property may be in some cases con- sistent with the receiptor's responsibility. For instance, if he receives a steamboat from an officer, seized under an attachment, he discharges 1 Edson V. Weston, 7 Coweu, 278. AndseeHealy v. Hutchinson, 20 Atlantic Eep'r. (N. H.) 3.'i2. That a receiptor, whose contract is one of bailment and not of in- demnity, may relieve himself from liability by proof of title in a third person, see Mason v. Aldrich, .36 Minn. 28.3. 2 Eogers v. Weir, .34 N. T. 403, 467; Brown v. Thayer, 12 Gray, 1. 3 Bliven v. Hudson River r>. Co., 35 Barb. 188; S. C. 30 N. T. 403. This case did not arise between the sheriff and his receiptor; but it arose between bailor and bailee, and it affirms the principle stated in the text. 4 Harvey v. Lane, 12 Wend. 563, 565; Edson v. Weston, 7 Coweu, 278, 280. ' Phillips V. Hall, 8 Wend. 610. •5 Anthony v. Comstock, 1 E. I. Eep. 454. Deposits. 35 his duty by returning it at the end of the litigation, when called for, in a condition as available for the purposes of the attachment as it was when he received it ; notwithstanding it has been run by the owner and altered and repaired. Property of this kind will depreciate as rapidly while lying still, rotting at the wharf, as it will in service ; and hence no action accrues against the receiptor on account of the use of the boat, or the alterations and repairs made on it, where he returns it in a state and condition as valuable as when he received it, or as valuable as it would have been without any use whatever.^ There are other kinds of property that could only be preserved by a reasonable use pending the litigation : e. g., milch cows or a span of horses would be injured for the want of use ; not to speak of vegetables and fruits, that are liable to decay. To prevent the consequences of this depreciation, our statute directs the sheriff, when so ordered by the court or judge, to sell perishable property seized by him under an attachment, and hold the proceeds in lieu of the property.^ In the absence of any statute on the subject, it is the duty of the of&cer, or of the person taking charge of the property on his behalf, to take reasonable care of it, considering its nature. Under a litigation protracted through a number of years (the case of the steamboat lasted six years), the mode of preserving the property becomes a matter of great moment, and requires considerable latitude in the use of means.' § 33. The sheriff levying upon property under an execution, or seizing it under an attachment, acquires a special property or interest in it and has a right to defend the title acquired by him by an answer or by an action, to protect his own interest, or that of the creditor on whose be- half he acts.* Having attached the goods or made his levy, the general property remains in the owner until the sale, and a special property vests in the officer who may defend the same, or maintain an action for its recovery.^ If the property be taken from his possession by an action 1 Hartshorn v. Ives, 4 R. I. 471. Steamboat Massachusetts running on the Long Island Sound; see Alvord v. Davenport, 43 Vt. 30. 2 X. Y. Code of Civil Procedure, § 656. To render property "perishable" within the meaning of the statute it must be inherently liable to deterioration and decay. It is not enough to justify an order for sale that the property is liable to depreciate in value because of changes in styles and fashions. Fisk v. spring, 25 Hun, 367. ^ Davis V. Ainsworth, 14 How. Pr. 346. In this case potatoes were ordered sold as perishable property. As to the effect of the failure of a bank or trust company hold- ing a fund attached, see McBride v. Farmers' Bank of Salem, 28 Barb. 476. * Einohey v. Stryker, 28 N". Y. 45. As to the extent of the sheriff's right to sue or defend in aid or defense of his levy under a warrant of attachment, see Anthony v. Wood, 96 N. Y. 180; Thurber v. Blanck, 50 N. Y. 80; Castle v. Lewis, 78 N. Y. 131. 5 Thayer v. Willet, 5 Bosw. 344, 357; Giles v. Grover, 6 Bligh. 277; Scott v. Morgan, 94 K. Y, 508, 515. 36 Law of Bailments . of replevin and he obtains judgment in the suit, he has aright, and it is his duty to prosecute the sureties in the replevin suit ; because the un- dertaking given by them becomes the equivalent for the property.^ § 34. The sheriff is not bound to take the goods into his actual custody ; it vrould be hardly possible for him always to do so.- He may leave them vi^ith the defendant, or with any other person, upon such terms as he chooses to make, being himself responsible for them. If the property levied upon consist of live stock, he may hire an agister to keep it ; if it consist of merchandise, he may place it in a warehouse for storage ; and these contracts are perfectly legal and valid. The question now arises, what rights do these contracts confer upon the officer's bailee ? He was formerly regarded as the mere servant of the officer, having no such interests in the property as would enable him to defend it against a stranger.^ 'He was held responsible for the property under his promise ; * and yet because he had no pecuniary interest in it, the courts for a while denied him the right to maintain an action for its recovery."^ The rule did not work well. It was found that a duty enforced by law must have its correlative right ; that if the law holds the receiptor responsible for the property, it must accord to him adequate means of defending it. It is therefore now settled upon principle and authority that he may follow the property, and maintain an action for its recovery against any person who takes it wrongfully from his possession." § 35. The receiptor ordmarily engages to keep and return the goods when called for by the sheriff. In terms the contract binds him uncon- 1 Swezey v. Lott, 21 N. Y. 481. 2 Smith V. Orser, 42 N". Y. 132. In making a levy under a warrant of attachment upon personal property capable of manual delivery, including a bond, promissory note, or other instrument for the payment of money, the sheriff must take the prop- erty into actual custody. N. Y. Code of Civil Procedure, § 649; Anthony v. Wood, 96 N. Y. 180. In levying an attachment upon the interest of one member of a firm, the sheriff is hound to seize and safely keep the property though he has some freedom in the choice of the means of doing this. The seizure of tlie property is a duty, and it is an official act. Gumming v. Brown, 4:5 N". Y. 514. The firm property is first liable for the firm debts. Eighth X-it. Bank v. Pitch, 40 N. Y. .'^JO. After the levy upon the interest of one or more partners in a firm, the remaining partners may obtain a discharge of the attachment in the manner prescribed by the statute. See N. Y. Code of Civil Procedure, §§ 693-096. 8 Dillenbeck v. Jerome, 7 Cowen, 294, and cases there cited; and Ludden v. Leavitt, 9 Mass. 104. * Lockwood V. Bull, 1 Cowen, .322. 5 His situation was just like that of any other bailee without hire. Faulkner v. Brown, 13 Wend. 03. « Miller v. Adsit, l(i Wend. 335 ; Thayer v. Hutchinson, 13 Vt. 504. The receiptor is more than an agent. Terwilliger v. Wheeler, 35 Barb. 620. Deposits. 37 ditionally ; in substance, it binds him to an honest and faithful per- formance of his engagement as a bailee.^ He does not undertake to defend the title to the property ; and it is quite clear that he wlU be discharged from his liability to the officer, where the attachment is dissolved or the execution is set aside.^ It is conceded that the receiptor may bind himself absolutely to re- turn the property or pay the execution. The sheriff, who jnay insure the property against loss by fire,' has a right to stipulate for an under- taking that will be sure to cover his liability. If he insures the prop- erty, though not bound to do so, the money realized in case of a loss insured against, will take the place of the property; i. e., it will belong to the plaintiff in the execution. So if he obtains a valid promise from the receiptor binding him in spite of all casualties or accident to rede- liver the property or pay the amount due on the execution, he is bound to enforce it ; the judgment creditor is entitled to the benefit of the contract.^ The engagement becomes a new security for the payment of the debt, collectible in the name of the sheriff, 5— a security that may be enforced notwithstanding the property is lost or destroyed by flre.^ , § 36. General and Special Property. One who has the title to any valuable thing, has what is legally termed the general, or absolute prop- erty in it. There is also what is known in the law as a special, hmited, or qualified property. Absolute property in goods draws after it the possession of them as a construction of law, so that if no adverse right of possession is shown, it is presumed to rest with the owner.' A special property arises out of contract with the owner for the temporary use or 1 Brown v. Cook, 9 John. K. 361 ; Edson v. Weston, 7 Cowen, 278. ^Butterfield v. Converse, 10 Cashing (Mass.) 317; Grant v. Lyman, 4 Met. 470; Sprague v. Wheetland, 3 Met. 416. s White V. Madison, 26 N. T. 117. * People V. Eeeder, 25 N. T. 302; Penobscot Boom Co. v. Wilkins, 27 Maine, 345. 5 Acker v. Burrall, 21 Wend. 605; S. C. 23 Wend. 606. 6 Cornell v. Dakin, 38 N. T. 253, 259. In Browning v. Hanford, 5 Hill, 588, .Judges kelson and Bronson, the majority of the comt, interpreted the promise to redeliver the chattels or pay the execution as not binding the receiptor any more strictly than his legal duty binds the sheriff. A question of evidence afterwards arose in the same case, viz., as to the effect of the sheriff's return as evidence of a loss by fire; 7 Hill, 120; in the Court of Errors the decision held the sheriff's return priina/acie evidence only of his official acts. Two senators held that the receipt bound the receiptor for the goods unless they were destroyed through the act of God or the public enemies. The case did not necessarily involve that point; and It is impossible to ascertain the opinion entertained upon the question by at least fourteen members of the court. ' 1 Cowen's Trea.athed. 340. 38 Law of Bailments. keeping of goods, or by the operation of law, as already mentioned ia the case of a levy by a sheriff on execution.^ Common carriers intrusted with property for conveyance, have a qualified interest in it suflcient to enable them to defend the same against everybody except the rightful owner.^ This special property in the carrier arises out of the nature and terms of his contract to carry safely and deliver the goods at the place of destination ; and the right of action vesting in him accompanies the possession as an instrument for its defense. A special property is likewise vested in the factor to whom goods are consigned for sale, and the right of action accrues to him as against third persons, even before he has acquired the actual possession of them.^ Commonly, it is true, the possession must accompany the special property in order to raise a right of action in the bailee.* Indeed, the rule is, that in order to give the bailee a right of action, he must have both the possession and a special property in the goods. ^ But a possession under the owner, as a common bailee, without hire, is enough as against strangers and wrong-doers; where the present right of possession unites with the right of property, either general or special, an action may be maintained." An action in the nature of trover may be maintained for the conver- sion of a note, bond or draft, the same as for the conversion of chattels, regard being had to the nature of the security. A sale of a negotiable note, without title, is a conversion, the same as the sale of a chattel ; ' and the plaintiff may recover prima facie the face of the note as dam- ages." In the action for a bond, the plaintiff need not recite the instru- ment, or give its date ; but he ought to set it forth sufficiently to show- its nature and the parties to it.' The situation of the parties, as well as the nature of the securities, is often important in its bearing upon the fact of conversion.'" The action of trover will lie for the conversion of a given package of bank bills or a bag of coin ; and it will lie for the conversion of money, where the amount is definitely ascertained without specific identiflca- 1 Gary v. Houghtaling, 1 Hill, 311; Root v. Chandler, 10 Wend. 110. 2 7 T. E. 12. The carrier has a right of possession against the tert feasor. ' Smith V. James, 7 Cow. Rep. 328, and the cases there cited. * 4 East, 214. 5 Faulkner v. Brown, 13 "Wend. 63. « Sutton V. Buck, 2 Taunt. 309. ' Keutgen v. Parks, 2 Sand. 60; Everett v. Coffin, 6 Wend. 603; Murray v. Burling, 10 John. R. 172. 8 Decker v. Mathews, 5 Sand. 439; S. C. 12 N". T. 313. 9 Pierson v. Townsend, 2 Hill, 550; Clowes v. Hawley, 12 John. 4S4. M Gould V. Gould, 35 Barb. 270; Smith v. Maine, 25 Barb. 33. Deposits. 39 tion of the coins or bills.^ No closer identification is required than that which the law calls for in an action for grain or goods.^ § 37. A mere depositary or gratuitous bailee is said to have a special property hi the goods entrusted to him ; and it is conceded he may maintain an action to recover their value against any stranger who con- verts the property, or through whose negligence it is lost or injured.' He need not have any real or beneficial interest in the goods ; his law- ful possession as a bailee and his liability on the implied contract for safe keeping give him a right of action.* The finder of a chattel acquires no right of property in it as against the rightful owner, and yet the law enables him to defend it against everybody else by an action of trover; it assumes that he has a special limited or qualified property in it, valid against all the world except the owner."" The receiptor to the sheriff has no direct actual interest in the goods ; he has the possession of the goods, and he has contracted to redeliver them ; his possession and his liability together enable him to recover against a wrong-doer who in- jures or takes the property from him without right.' It is clear then that a bailee of goods, a depositary without having any beneficial interest in the goods themselves, does have such a possessory interest in them as will enable him to defend them by an action at law.' It follows that every bailee of goods must have the same right. A naked prior possession of chattels, where nothing else appears to qualify its character, is enough to establish a right of action in the plaintiff, and put the defendant upon showing by what title he claims to hold them. This is upon the principle that possession, until the con- trary appears, is evidence of title which must prevail, until it is over- come by testimony.' The plaintiff, having a special property inthe goods, may recover their 1 Graves v. Dudley, 20 N. T. 76; Gordon v. Hostetter, 37 N. Y. 99. 2 Kimberly v. Patchin, 19 N. T. 330. ' Chamberlain v. West, 37 Minn. 54. * Faulkner v. Brown, 13 Wend. 63. The plaintiff was the depositary of a roll of leather, which was stolen and afterwards sold to the defendant. Moran v. Portland, 35 Maine, 55 ; plamtiff in this case sued as the depositary of a carpet bag. Kellogg v. Sweeney, 1 Lansing, 397; S. 0. 46 N. T. 291; the guest at an inn sued the landlord for the value of a bag of gold coin, the possession of which he held as a mere mandatary. 5 Armory v. Delamirie, 1 Stra. 505; 3 Salk. 365; McLaughlin v. Waite, 9 Cowen, 670; Hamakerv. Blanchard, 90 Pa. St. 377; Tancilv. Seaton, 28Gratt. 601; Lawrence V. Buck, 62 Me. 275; Durfee v. Jones, 11 E. I. 588. « Miller v. Adsit, 16 Wend. 335; Thayer v. Hutchinson, 13 Vermont, 504. ' Rooth V. Wilson, 1 Barn. & Aid. 59; Howorth v. ToUemache, 5 Scott N. E. 332. 8 Duncan v. Spear, 11 Wend. 54; Pish v. Scutt, 21 Barb. 333; Wickes v. Adiron- dack Co., 2 Hun, 112; Wiseman v. Lynn, 36 Ind. 259; Tremont Coal Co. v. Manly, eo Pa. St. 384. 40 Law of Bailments. full value against any one but the general owner who wrongfully takes them from his possession ; ^ or against one by whose negligence they are injured or lost.^ § 38. The general owner of goods, having a present right of posses- sion, may also maintain either trespass or trover against a stranger for an injury or conversion of the property.'' The action may be brought by the bailee or by the general owner ; the right to sue is indispensable to enable each to protect his particular interest ; and a judgment in an action by the general owner will bar an action by the bailee.* § 39. With us the form of the action is not now material. Under the common law practice the general owner of goods bailed without reward, as in the case of a gratuitous loan or deposit or mandate, may maintain the action of trespass against a third party for taking them, because he has the constructive possession, or the right to reduce the goods to his actual possession at any time ; '' and he cannot maintain that action for his goods, bailed for hire on a definite term which is yet unexpired.^ So also the general owner of goods in the hands of a gratuitous bailee has a present right of possession sufficient to enable him to maintain the action of trover against a stranger. In both these common law actions, the plaintiff must have a property in the goods and constructive posses- sion, i. e., a present right of possession.^ These rules of procedure, though they appear on a first readuag im- portant only to insure a right choice of the action to be brought, do really show the true relation existing between the bailor and bailee. They assume that a gratuitous bailee for an indefinite time has no right or interest in the goods which he can assert against his bailor ; that he is lawfully in possession and has such a right or interest in the goods against every one else. It follows that he is not liable to an action for the goods by the owner or by the bailor, until after a demand and 1 Alt V. Weidenberg, 6 Bosw. 176; Kissam v. RolDerts, id. 154; Spoor v. Holland, H Wend. 44.j; Chadwick v. Lamb, 20 Barb. 518; IngersoU v. Van Bokkelin, 7 Cow. 670, 681; Heard v. Brewer, 4 Daly, 136. And see Allen v. Judson, 71 X. Y. 77; Fowler v. Haynes, 91 N. Y. 346. 2 Kellogg V. Sweeney, 46 N. Y. 291; S. C. 1 Lansing, 397. ' Thorp V. Bueling, 11 John. K. 285. * Greene v. Clarke, 12 N. Y. 343; N. J. Steam N"av. Co. v. The Merchants' Bank, 6 How. U. S. R. 344; Baird v. Daly, 57 N. Y. 236. 6 Orser v. Storms, 9 Cowen, 687; Ely v. Elile, 3 K. Y. 506. « Putnam v. Wyley, 8 John. E. 432. ' Gordon v. Harper, 7 Durnford & East, 9; Niqhols v. Bastard, 2 Cromp. il. & Eos. 659; Bloxamv. Sanders, 4 Barn. & Cress. 941; Ferguson v. Christall, 5 Bing. 305. It doe; i:o'; follow that the general owner of goods, let on hire for a term, is without a remc.V/ .or an injury to his reversionary interest; he has an action on the case there- foi-. iifarj 1. London .t S. Western E. Co., 11 Com. Bench N. S. 850. S54. Deposits. 41 refusal.* A borrower for an indeflnite time is not liable to an action until after a demand,'-' unless it appears that he has delivered it to another party without authority;* or misappropriated it in bad faith." § 40. It is necessary to fix the date when an action may be brought against a gratuitous bailee, in order to ascertain the time when the stat- ute of limitations will begin to run against the action. The depositary of goods holds them in trust, subject to the owner's order ; ^ he is not in fault, and therefore no action lies against him until, being called upon for the goods, he refuses to deliver them. The same rule applies to a deposit of money on call ; the depositary is not liable to an action until a demand is made therefor and the money refused. The situation is the same as it is where a man deposits money in a bank payable to his order or on his check. A suit cannot be brought until after a refusal to pay on the usual demand ; and the statute does not run until the action accrues." § 41. Where money is deposited in a bank in the ordinary course of business, it does not raise a contract of bailment. The transaction amounts to a loan without interest, and creates the relation of debtor and creditor ; the bank receives the money and tmdertakes to repay the same on demand at all events. The fund is mingled with other moneys and becomes an absolute debt due from the bank, for which it is liable even though the money be lost without any fault on its part. It is called a deposit ; but this word is now used to describe the formal act of delivery to the bank, and does not declare the nature and effect of the transac- tion.' A deposit in a savings bank has the same effect as an ordinary deposit in other banks. The depositor transfers his money, and takes 1 Brown V. Cook, 9 John. K. 361; Phelps v. Bostwick, 22 Barb. 314; Beardsleev. Eichardson, 11 Wend. 2.5; Koss v. Clark, 27 Mo. 549. 2 Gilbert v. Man. I. Manuf. Co., 11 Wend. 625; Eyerson v. Kauffield, 13 Hun, 386. 3 Esmay v. Fanning, 9 Barb. 176. * Pratt V. Bogardus, 49 Barb. 89, 95. It has been held that a failure to return with- in the time limited is a conversion. Clapp v. Nelson, 12 Texas, 370. 5 Ball V. Liney, 48 N. T. 6; Winkley v. Faye, 33 N. H. 171. 6 Payne v. Gardiner, 29 N. T. 146; S. C. 39 Barb. 634; Downes v. The Phtenix Bank of Charlestown, 6 Hill, 297; Boughton v. Flint, 74 N. T. 476; Howell v. Adams, 68 N. Y. 314; Smiley v. Fry, 100 N. T. 262; Munger v. Albany City Kat. Bank, 85 N. Y. 580. ' Commercial Bank of Albany v. Hughes, 17 Wend. 94, 100; Carroll v. Cone, 40 Barb. 220; Dykers v. The Leather Manuf. Bank, 11 Paige's Ch. 612; Marsh v. Oneida Central Bank, 34 Barb. 299; Libby v. Hopkins, 104 U. S. 303; Phoenix Bank v. Eisley, 111 U. S. 125; Cragiev. Hadley, 99 N. Y. 131; Metropolitan Nat. Bank v. Loyd, 90 N. Y. 530. 42 Law of Bailments. back a promise of repayment with interest from the bank, a chose in action.^ There is nothing in its nature to prevent a bailment of money. If a parcel of bank bills or a bag of coin be deposited with a bank or with any other person, on a promise to redeliver the specific bills or coin, the transaction creates a bailment ; the title does not pass.^ It may be, it is often difficult to trace money, either in bills or coin ; being identified, the title will be protected the same as the title to goods.' It is property which may be levied upon by a sheriff, or delivered on a contract of bailment.^ The deposit of money on interest or for use is not a bail- ment ; it is intended to pass the title ; it creates a debt. It is however in the nature of a deposit, payable when called for ; so payable by the terms and substance of the contract.'' On this account a deposit is dis- tinguished from a loan of money ; the statute of limitations begins to run against a suit on a note, payable on demand, from its date, no actual demand being necessary.^ In the case of a deposit, the statute runs from the time when a suit may be brought against the depositary, namely, from the time of the demand and refusal. § -42. Where the depositary converts the goods, the owner's action for the conversion accrues at once, and the statute begins to run from that time ; as subsequent demand and refusal will not create a new start- ing-point ; or what is the same thing, in effect, a new cause of action.' A refusal to deliver on demand, made after a sale or other disposition of the goods, does not show a conversion of the property ; the refusal is evidence of a conversion, and sometimes equivalent to the act itself. At all events, the depositary is entitled to fair play and a reasonable ' Lund V. The Seamen's Bank, 37 Barb. 129; Chapmau v. White, 6 X .T. 412, 417; Warhus v. Bowery Savings Bank, 21 N. T. 543; People v. Mechanics & Traders' Savings lust., 92 X. T. 7. 2 Graves v. Dudley, 20 N. T. 76, 80; Draycott v. Piot, Croke's Eliz. 818, 841. 8 Tradesman's Bank v. Merritt, 1 Paige, 302; Mechanics' Bank v. Levy, 3 Paige, 606; McBride v. The Fanners' Bank, 26 N. T. 4o0, 450. * McBride v. The Farmers' Bank of Salem, 28 Barb. 470; Thatcher v. Bank of State of N. T., .5 Sand. 121. 5 The Kingston Bank v. Gay, 19 Barb. 459; Adams v. Orange Co. Bank, 17 Wend. 513, 515; Lund v. The Seamen's Bank for Savings, 37 Barb. 129. 6 Howland v. Edmonds, 24 N. Y. 307; Wheeler v. Warner, 47 X. T. 519. See Mer- ritt V. Todd, 23 N". Y. 28; Herrick v. Woolverton, 41 N. Y. .581, 591, 596; McMullen V. Eafferty, 89 N". Y. 456; DeLavallette v. Wendt, 75 N". Y. 579; Bartholomew v. Seaman, 25 Hun, 619; Milne's Appeal, 99 Pa. St. 483; Andress's Appeal, 99 Pa. St. 421; :Mills v. Davis, 113 N. Y. 243; Kraft v. Thomas, 123 Ind. 513; Jones v. NichoU, 82 Cal. 32. ' Granger v. George, 5 Barn. & Cress. 149; Kelsey v. Griswold, Barb. 436; Bruce T. TUson, 25 N. Y. 194. Deposits. 43 opportunity to ascertain the claimant's right of property.^ An un- qualified refusal or an attempt to set up title in a third party, is a con- version ; '"■ as where the bailee gives a receipt to a third party for the goods and agrees to hold them to his order.^ But a wrongful act is not to be presumed, even in favor of a long continued possession. A conversion may be waived by the owner of the goods, so as to pre- clude him from bringing an action therefor ; * but the wrong-doer does not relieve himself from liability by an offer to restore or replace the goods, after an act of conversion.' § 43. Rule of Liability. A gratuitous bailee is bound to take reason- able care of the goods entrusted to him ; the same or as much care as he takes of his own property of a like kind ; such care as the cir- cumstances and the nature of the property naturally call for.^ The same rule applies to the depositary and to the mandatary ; the deposi- tary receives the goods to keep gratuitously, until the owner requires them ; and the mandatary receives them to carry and deliver or to perform some act in relation to them, without recompense ; in each case the bailee assumes an office of friendship and good will, and is bound merely to use a slight degree of diligence. In other words, he is only liable for a loss or injury to the goods resulting from his gross negligence ; or what is the same thing, from, his omission to use slight dihgence. For in the legal sense, a failure to use shght diligence or that care which every man of common sense, however tuattentive, takes of his own goods, is considered gross negligence ; ' these terms being used interchangeably as practically equivalent to each other. Under the rule as it is usually stated, the depositary of goods, re- ceiving them gratuitously, without any agreement to keep them safely or take any special care of them, is not responsible for their injury or loss unless it happens through his gross neglect or fraud.^ 1 Carroll v. Mix, 51 Barb. 212; Ball v. Liney, 48N. T. 6; McEntee v. N. T. S. Co., 45 N. T. 34. 2 Kogers v. Weir, 34 N. T. 463. s Holbrook v. Wight, 24 Wend. 169. * Stewart v. Drake, 46 N. Y. 449. 5 Livermore v. Northrup, 44 N. T. 107; Anthony v. Comstock, 1 K. I. 454; Wood V. Pales, 24 Penn. St. 246; Brewster v. Silliman, 38 N. T. 423. ISTew Tork City v. Lent, 51 Barb. 19; property peculiar; an autograph letter of Geo. Washington. * Coggs V. Bernard, 2 Ld. Kaym. 909; Foster v. The Essex Bank, 17 Mass. 479. ' Tompkins v. Saltmarsh, 14 Serg. & Rawle, 275 ; Dougherty v. Posegate, 3 Clarke, Iowa, 88; Jones on Bailm. 112. 'McKay v. Hamlin, 40 Miss. 472; Gulladge v. Howard, 23 Ark. 61; Spooner v. Mattoon, 40 Vt. 300; Persch v. Quiggle, 57 Penn. St. 247; Johnson v. Reynolds, 3 Kansas, 257; Hills v. Daniels, 15 La. An. 280; Newhall v. Paige, 10 Gray, 366; 44 Law op Bailments. § 44. It is manifest that the care required must be such as the cir- cumstances and the nature of the property demand ; that is to say, in applying the general rule, respect must be had to the situation of the parties and to the particular kind or character of the property which is the subject to the bailment. One who receives a picture, a cartoon for example, is bound to have a care that it be not placed in an exposed situation, as against a damp wall ; '■ and one who receives money on deposit must use a degree of diligence and attention adequate to the performance of the trust.^ A delivery of money to invest without compensation, would fall within the definition of a naked bailment, and it would certainly create a trust which would call for a high degree of prudence and good sense in its execution ; the mandatary would prob- ably be held bound by the rule applicable to an ordinary trustee.' The nature and value of the deposit, and the circumstances attending the bailment, naturally fix the attention of the bailee, and as naturally indicate the precautions to be taken for the safety of the property. A soldier in camp receiving money from his friend for safe keeping, will spontaneously keep and carry it with a care to prevent its being lost or stolen *; the bailee will do the same thing passing through the crowded streets of a city ; ^ or in any casual crowd, so apt to be infested and plundered by well dressed thieves." Now the law requires from the bailee just these natural precautions, dictated by the situation and circumstances of the bailment : and in applying the established rule of liability, it is the province of the court in each case to remark upon and give due weight to the circumstances of time, place and danger attend- ing the loss.' The reason of the situation materially affects the rule of law ; it gives rise to the rule, and it presides over its enforcement. Dougherty v. Posegate, .3 Clarke, Iowa, SS; Conwell v. Smith, S Ind. ."53(7; Edson v. Weston, 7 Cowen, 278; Onderku-k v. Central Xat. Bank, 119 N. Y. 2ii3; Heathering- ton V. Richter, .31 W. Va. 8.'j8; Tancil v. Seaton, 28 Gratt, 601; Schermer v. Neurath, 54 Md. 491; Davis v. Gay, 141 Mass. 531; Carrington v. Ficklin, ;32 Gratt. 670; Patter- son T. Mclver, 90 N. V. 493; Whitney v. First Nat. Bank, .j.3 Yt. 15.j. 1 Mytton V. Cock, 2 Str. 1090. 2 Jenkins v. Matlow, 1 Sueed (Tenn.), 248; and Tracy v. Wood, 1 Mason, 132. 8 King V. Talbot, 50 Barb. 4.53, 482; S. C. 40 N. Y. 76, 86. A trustee must invest on bond and mortgage or in government funds, or in bonds or stocks of cities of this State issued pursuant to a law of this State. See Laws of 1889, Chap. fi."j. * Spooncr v. Jlattoon, 40 Verm. R. 300. 6 The Eendsberg, 6 Bob. 141, 1.15. 6 Graves v. Ticknor, 6 N. H. 537; Nelson v. Mcintosh, 1 Starkie N. P. 188. ' Whitney and wife v. Lee, 8 Metcalf, 91. A promissory note was delivered to a bailee "to secure and take care of it;" held without explanation that this was a bailment merely for safe keeping, and that the bailee was liable only for fraud or gross negligence. Cn. J. Shaw: " The law has endeavored to make a distinction in the Deposits. 45 § 45. The depositary must act with perfect fairness, dealing witli his friend's goods as he does with liis own. Ordinarily this is the true measure of his duty. The owner deposits a box containing gold and negotiable securities in a bank, locked in the usual manner, and the bank places it in its vault where it keeps its own coin and securities, without compensation ; here we have a naked bailment, and the bailee is not liable for a loss by theft or by the fraud of its agents or servants ; it is not liable because it has exercised the same care of the parcel received on deposit as it took of its own property of the same kind.' The de- positor understands beforehand the circumstances of danger and safety which invest the vaults of the bank ; and he cannot reasonably demand any new precautions for the safety of his property.^ degrees of care and diligence to which different bailees are bound ; distinguishing between gross, negligence, ordinary negligence, and slight negligence; though it is often difficult to mark the line where the one ends and the other begins. And it must be often left to the jury, upon the nature of the subject matter and the particular cir- cumstances of each case, with suitable remarks by the judge, to say whether the particular case is within the one or the other. Subject to these remarks upon the application of these distinctions, we think it well settled, that a bailee for safe keep- ing, without reward, is not responsible for the article deposited, without proof that the loss was occasioned by bad faith or gross negligence. This rule was settled on great consideration, and after full deliberation, in Foster v. Essex Bank, 17 Mass, 479." 1 Foster V. Essex Bank, 17 Mass. 479; Onderkirk v. Central Nat. Bank, 119 N. T. 263, 271; Caldwell v. Hall, 60 Miss. 410; Whitney v. First Nat. Bank, 55 Vt. 155;, Smith V. First National Bank of Westfield, 99 Mass. 605. II. S. bonds were enclosed in an envelope and deposited with the bank in its vault in the usual way for safe keeping; not being restored on demand, held that defendant was liable only for want of ordinary care, or for gross negligence ; liable for the negligence of its officers or servants, but not liable for their theft. Maury and Oshorn v. Coyle, 34 Md. 235, 247; Lancaster Co. National Bank v. Smith, 62 Pa. St. 47; Glover v. Burbidge, 27 S. C. 305; Schermer v. Neurath, 54 Md. 491. 2 Our safety deposit companies are organized for the purpose of insuring to the owner a greater degree of safety. The rule of law is held the same in several States. Griffith V. Zipperwick, 28 Ohio St. 388; Scott v. Bank of Cherry Valley, 72 Penn. St. 471, 478; First National Bk. of C. v. Graham, 79 Penn. St. 106; 19 Amer. E. 122, 181. The act of receiving -luch security for safe keeping can hardly be considered un- authorized when it is done habitually, with the privity and knowledge of the directors and officers of the bank. First Nat. Bank of C. v. Graham, 100 U. S. 699. The right to make the contract and the rule of liability are fully discussed in First National Bank v. Ocean Nat. Bank, 00 N. Y. 278, where the recent authorities are cited; and Wiley V. First Nat. Bank, 47 Vt. 546. It is now settled that if a bank is accustomed to take special deposits of bonds and stocks, and this is known and acquiesced in by the directors, and the property thus deposited is lost by the gross carelessness of tlie bank, the bank is liable in like manner as if the deposit had been authorized by its charter. First Nat. Bank v. Graham, 100 U. S. 699, 702; Manhattan Bank v. Walker, 130 U. S. 267; Turner v. Bank of Keokuk, 26 Iowa, 562; Smith v. Bank of Westfield, 40 Law of Bailments. § 46. The rule cannot be stated with much precision. Good faith requires of the depositary that he shall take the same care of the goods which he receives on deposit, as he does of his own ; and the law exacts from him at least this measure of diligence. At the same time, it cannot be affirmed that this is the limit of his liability ; because he is answerable for a loss that happens through his gross neglect, and he cannot excuse himself by showing that he has been equally negligent in the care of his own property.^ § 47. It has been argued that gross negligence by the bailee in the care of goods is evidence of fraud, and equivalent to it in its effect upon the contract. If by this we are to understand that the bailee is liable for the goods lost or destroyed through either his bad faith or gross negligence, the proposition must be accepted as good law : but if we are to understand by it that gross neglect is the same thing as a viola- tion of good faith, the 'doctrine cannot be maintained.- In a moral sense gross negligence by the bailee bears a near resemblance to bad faith, because his express or implied engagement binds him to a faithful keep- ing of the property ; he has assumed an active duty, he is bound to take care of the property. And a failure to do so evinces a want of good faith, or faithfulness in the discharge of duty.^ Under the Roman or civil law gross neglect was treated as equiva- lent to fraud ; but the common law, under which different branches of the same tribunal pass, one upon the principle, and the other upon the conclusions of fact to be drawn from the evidence in the case, does not pronounce absolutely upon a question which must be solved by infer- ences.* It does not assume to declare what shall be taken as conclusive evidence of fraud; in other words, it does not undertake to anticipate and provide against fraud by any specific form of proof. It assumes rather that the fertility of human invention is too great, and the fraudu- lent devices and schemes of men too complex, to be classified ; it there- fore leaves the question of fraud to be solved in each case as one of fact.'^ 99 Mass. 605 ; Chattahoochee Bank v. Schley, .08 Ga. 369. A national bank as part of its legitimate business may receive special deposits. First Nat. Bank v. Graham, 100 IT. S. 699; Pattison v. Syracuse Nat. Bank, 80 N. Y. 82; Onderkirk v. Central Nat. Bank, 119 N. Y. 263. 1 Tracy v. Wood, 3 Mason, lOii; Doorman v. Jenkins, 2 Adol. <.t Ellis, 256; Kooth V. Wilson, 1 Barn. & Aid. 59; Eivara v. Ohio, 3 E. D. Smith, 264; Murray v. Clarke, 2 Daly, 102. - See Hun v. Cary, 82 N. Y. 65, 72. 3 Jones on Bailm. 40 and 120; 17 Mass. 479. * Tudor V. Lewis, 3 Met. Ky. 378. 5 Chesterfield v. Jansen, 2 Ves. Sen. 155; Mortlockv. BuUer, 10 Ves. 308. Fraud is of the nature of crime, and must be afarmatively proved. Ward v. Center, 3 John. K. Deposits. 47 § 48. It was at one time held that the dehvery of goods to be safely- kept does not create any greater liability than a simple deposit with- out any stipulation ; on the authority of Lord Coke, that to keep and to keep safely are one and the same thing. The modern doctrine does not support the rule; it allows the bailee to lessen or enlarge his liability by contract.^ In a common carrier's contract, a stipulation to carry and deliver " safely and securely " does not enlarge his liability ; ■' in a depositary's contract the engagement to keep safely in- creases his obligation, though it can hardly be held to bind him absolutely for the safety of the goods. It binds him according to its terms, giviag to these a fair and reasonable interpretation.^ The implied contract for the safe keeping of the goods by the depos- itary, does not render him liable for a loss of them by fire, theft or robbery, unless he has exposed them to such loss by his gross negli- gence.* Even a bailee for hire is not liable for losses of this nature ; he does not assume the risk of the misconduct or tortious acts of third parties.* Hence the owner and not the baUee bears the risk of loss from such extraneous causes. § 49. Where a sealed package containing securities or a box con- taining valuables, and locked, is delivered to a depositary to keep with- out any information as to their contents, it is his duty to preserve them with reasonable care ; such care as prudent men usually take of property locked or sealed up in that way. He would not be required to assume that the package contained bank bills or negotiable notes, or that the box contained jewels, nor to keep the articles with the care with which he would guard that kind of property. He would have a right to 211, 281. Fraud is not treated exactly the same in equity as at common law. Wil- lard's Eq. 145, 14'7. 1 Coggs V. Bernard, 2 Ld. Eaym. 909-915; Alexander v. Greene, 3 Hill, 9; S. C. 7 Hill, 533; Dorr v. New Jersey Steam Nav. Co., 11 IT. T. 485, 491. 2 Austin V. Manchester & C. Eailway, 5 Eng. Law & Eq. 329; Collett v. The Lon- don & N". Eailway Co., 6 Eng. L. & Eq. 305; Shaw v. York & N". M. Eailway Co., 13 Q. B. 347; Boss v. Hill, 2 Man. G. & Scott, 877. s 2 Bl. Conrni. 452; Ames v. Belden, 17 Barb. 513; Hyland v. Paul, 33 Barb. 241. * Hyland v. Paul, 33 Barb. 241; Southcote's case, 4 Co. Rep. 83, 84; Bonoin's case, Fitz. Albridge. Detinue, 59; Coggs v. Bernard, supra; Foster v. Essex Bank, supra; Finacue v. Small, 1 Esp. N. P. 315; Schmidt v. Blood, 9 Wend. 268; Monteith v. Bis- sell, Wright, 411. s Ewing V. French, 1 Blackford's (Ind.) E. 353; Norton v. Woodruff, 2 N. T. 153. Under an express contract to keep safely, the bailee could hardly be bound to insure the owner against such casualties. See Worth v. Edmonds, 52 Barb. 40; but he might be liable for loss by negligence; Webb v. R., W. & O. E. E. Co., 49 K. Y. 420; and has the right to incur the necessary expenses to insure the safety of the property; Harter V. Blanohard, 64 Barb. 617. 48 Law oi^ Bailments. assume that the box or package contained no greater value than is ordinarily enclosed in that manner ; because no bailee can be drawn by artifice into a responsibility greater than he intended to assume.^ § 50. The situation and circumstances may be shown as bearing upon the depositary's liability : ^ can his individual character also be made the subject of judicial investigation ? The manner in which his liability is usually stated, assumes that it is material. Kent says, " Such a bailee who receives goods to keep ffrati.^ is under the least re- sponsibility of any species of trustee. If he keep the goods as he keeps his own, though he keeps his own negligently, he is not answerable for them ; for the keeping of them as he keeps his own is an argument of his honesty." Again he says, " If the depositary be an intelligent, sharp, careful man in respect to his own affairs, and the thing entrusted to him be lost by a slight neglect on his part, the better opinion would seem to be that he is then responsible." And Lord Holt is still more emphatic : " If the bailee be an idle, careless, drunken fellow, and comes home drunk, and leaves all his doors open, by reason whereof the goods deposited are stolen, together with his own, he shall not be charged, because it is the bailor's own folly to trust such an idle fellow.** So far as the character and habits of the depositary are developed in the transaction, it is well nigh impossible to ignore them ; and yet it seems quite clear that the depositary, sued for damages resulting from his gross negligence, would not be allowed to prove as an independent fact that he is habitually a very careless and improvident man, for the purpose of reducing the measure of his liability. For in truth this measure has no reference to his individual character ; it looks rather to the general conduct and character of a whole class of persons ; it is not so flexible that it can be adjusted to the infirmities of an individual.^ 1 Bonoin's case, Fitz. Abr. Detinue, 59; Part IV. Coke E. 83 b, 84 a. A common carrier cannot be entrapped, by tlie artifice of pacliing, into liability for very valuable articles under the guise of coarse and inexpensive goods. "Warner v. Western T. Co., 5 Eobt. 490; Orange Co. Bank v. Brown, 9 Wend. 85, 116. In one sense the depositor of the box of securities does not intrust the securities with the depositary; delivered to a banker they do not become subject to his lien ; Brandao v. Barrett, 12 Clark & Finnelly, 787. Under the California Code the liability of a depositary for negligence cannot exceed the amount which he is informed by the depositor or has reason to sup- pose the thing deposited to be worth. Cal. Civil Code, § 1840. 2 Knowles v. Atlantic & St. L. E. E., 38 Maine, 5.5; Barry v. Marix, 10 La. Ann. I!. 248. 8 2 Kent's Comm. 561, 504. ■• Conway Bank V. Amer. Ex. Co. 8 Allen, 512; Morse v. Crawford, 17 VI. 4::^; Swann v. Brown, 8 Jones Law N. C. 150. Deposits. 49 The depositary's mode and means of keeping or storing like good •> may be fairly considered, if known to the bailor at the time of the de- livery ; and where he knows the place and the manner in which his goods are to be kept, the law may fairly presume his assent m advance that his goods shall be thus treated. Evidence of this kind would be admissible to show either a contract for the keeping of the goods in that manner, or a waiver of any greater degree of diligence in their safe keeping.^ § 51. It is laid down as the rule of the civil law that the depositary is bound for a higher degree of diligence where he ofEers of his own ac- cord to assume the custody of goods ; the reason assigned for the rule being, that he thereby possibly prevents them from being placed in more secure hands. Under the Code of Louisiana the usual rule of liabUity is rigorously enforced, where the deposit is made at the re- quest of the depositary.^ Assuming that he acts in good faith, why should his previous offer of service be construed to his disadvantage ? A civil motive, an expression of good will, is hardly sufHcient to strengthen or intensify a rule of law. On a sudden emergency demand- ing prompt action, as in the presence of a riot or fire, an offer to receive your neighbor's goods should hardly be discouraged by a rule of law. § 52. The natural increase of property accrues to the owner. Divi- dends upon stocks, the interest upon securities, and the young of domestic animals belong to the owner, and not to the depositary.' This rule of reason has been applied and enforced in a great variety of cases. It is assumed and acted upon, as we shall find, in all contracts for the hiring of farms on shares ; * in contracts for the hire and return of cattle or sheep on shares ; ' and in contracts involving a pledge of personal property. § 53. A Second Bailment. The person who has property on deposit, so as to render him liable as a bailee, may enter into a contract of bail- ment with a third person to whom he may deliver the goods for safe keeping.^ But such a contract will not prevent the owner of the goods from following them ; he can even, in some instances, maintain trespass against the person who seizes them in the hands of his bailee, who has 1 Knowles v. Atlantic & St. L. R. R., 38 Maine, 55; and Conway Bank v. Amer. Ex. Co., 8 Allen, 512. 2 Code of Louisiana, Art. 2908, 2909. ' Orser v. Storms, 9 Cowen, 687; tlie case of the Swanns, — Coke Rep. *Taylorv. Bradley, 39 N. Y. 129; Wilber v. Sisson, 53 Barb. 258; Caswell v. Dis- trict, 15 Wend. 3*79. ^Putman v. Wise, 1 Hill, 234. It is a sale when the hirer agrees to return a certain number, but not the same sheep or cattle. Bartlett v. Wheeler, 44 Barb. 162. ^Armory v. Delamirie, 1 Str. Rep. 505. 4 50 Law of iiAiLr.iiiXTs. no interest or claim to hold the goods coupled with his possession. The rule of law applies here, that the general property draws after it the possession.! Xot so where the bailee has a special property in the goods as against the owner of them, such as the lien which the master of a vessel has on the cargo for freight. In this case, the delivery of the goods for safe keeping by the master who has a lien on them, is not such a parting with the possession as destroys the lien. Generally, the possession of the mere naked bailee is held in law to be the possession of the depositor ; the undertaking of the depositary being gratuitous, may be determined on demand. And where the bailee desires to free himself from the responsibility incident to the contract, he may with- out doubt do so on his own motion, by restoring the goods to the owner or depositor. Not having stipulated to keep them for any particular length of time, he cannot be compelled to continue an undertaking wholly gratuitous on his part.^ § 54. Redelivery. The rule is that the depositary is bound to redeliver or restore the chattels bailed to the bailor ; ' and the bailor may recover the goods of his bailee without proving his right of property in them ; until the goods are seized by the right owner or by some superior title, the depositary is compelled to restore the goods to the person from whom he received them, whose right he cannot controvert.^ But if he deliver them to the rightful owner, on demand, he has a good defense against the bailor, since a delivery in such a case is not a matter of choice.^ § 55. To avoid the inconvenience of a double litigation, where there are rival claimants to the property, and an action is brought against the bailee for its detention, the law, in some cases, permits the adverse claimant to be brought into the suit by the process of garnishment!' But a much more convenient remedy is furnished in courts of equity by a bill of interpleader, which may be filed where the plaintiff stands in the situation of an innocent stakeholder, against defendants claiming of him the property, fund or duty, by different or separate interests ; the object being to protect the complainant against a double litigation, involving also the danger of a double recovery against him. The bUl lies only where the complainant is in possession, and claims no interest 1 Thorp V. Burling, 11 John. Rep. 286. 2 Eoulstou V. McClelland, 2 E. D. Smith, 60. ^ Onderkirk v. Central ISTat. Bank, 119 N. T. 263, 267. « EoU. Abr. 607; 1 Bae. Ab. 369. 6 King V. Eichards, 6 Wliarton, 418; Scranton v. M. &, F. Bank of Rochester, 24 N. Y. 424; Western Transportation Co. v. Barber, 56 N". Y. 544; Hentz v. The Idaho, 93 U. S. r,75. « 2 Kent's Comm. 568. Deposits. 51 in the property in dispute.^ Its accepted definition is : "A bill exhibited, when two or more persons claim the same debt or duty from the com- plainant, by different or separate interests ; and he not knowing to which of the complainants he ought of right to pay or render it, fears that he may be damaged by the defendants (as by paying his money to a wrong hand), and therefore exhibits his bill of interpleader against them, praying that the court may judge between them to whom the thing belongs, and that he may be indemnified. It claims no right in opposition to those claimed by the persons against whom the bill is ex- hibited, but only prays the decree of the court, to decide between the rights of those persons for the safety of the complainant." ^ The allegations in a bill of interpleader are : 1. That two or more persons have preferred a claim against the complainant ; 2. That they claim the same thing; 3. That the complainant has no beneficial inter- est in the thing claimed ; and 4. That he cannot determine, without hazard to himself, to which of the defendants the thing of right be- longs.' It is not necessary that an action or actions should have been com- menced in order to give the right to file this bill,* nor that the claims should be both of an equitable nature ; one may be an equitable and the other a legal claim. But the bUl cannot be filed where the plaintiff stands in the relation of a wrong-doer towards either of the claimants, nor where one of them has a clear right to the exclusion of the other.* To sustain the bill, there must also be some sort of privity between all the parties, of estate, title or contract. Parties claiming in absolutely adverse rights, not founded in any privity of title, or on any common contract, cannot be compelled to interplead." 1 2 Barb. Ch. Prac. 118; Atkinson v. Manks, 1 Cowen, 691; Ball v. Liney, 48 K. T. 6, 13; Johnston v. Lewis, 4 Abb. Pr. N. S. 150; McKay v. Draper, 27 N. T. 256; Schuyler v. Hargous, 28 How. Pr. 245; Crane v. McDonald, 118 N. T. 648. 2 Cooper's Equity Plead. 456; Harrison Ch. Pr. 96; Mad. Ch. 172, 3. 8 Atkinson v. Manks, 1 Cowen, 703; McHenry v. Hazard, 45 Barb. 657; U. S. Trust Co. V. \yiley, 41 Barb. 477; Bassett v. Leslie, 123 N. T. 396, 399; Killian v. Ebbing- haus, 110 U. S. 568; Crane v. McDonald, 118 N. T. 648. 4 Richards v. Salter, 6 John. Ch. E. 445. 6 Mohawk and Hudson Railroad Co. v. Clute, 4 Paige, 384; Shaw v. Coster, 8 Paige, 339; Morgan v. Fillmore, 18 Abb. Pr, 217; U. States v. Victor, 16 Abb. Pr. 153; Bas- sett V. Leslie, 123 N". T. 396. « Cooper Eq. PI. 43; Story's Eq. PI. 239; Vosburgh v. Huntington, 15 Abb. Pr. 254; Boston Bank v. Skillings, etc., Lumber Co., 132 Mass. 410. Whether this rule still ex- ists in this State is perhaps an open question. See Crane v. McDonald, 118 N. T. 648, 656, 657. The fact that the adverse titles of the claimants are both derived from a common source is suificient to sustain an interpleader under the rule requiring privity between defendants. Id. 52 ijAW (jF Bailments. § 56. Chattels deposited by several joint owners must be redelivered on the joint demand of the persons making the deposit. Sir William Jones mentions an instance in which this principle was applied in prac- tice at Athens, ^\ith the remark that the doctrine was good at Rome as well as at Athens, when the thing deposited was in its nature incap- able of partition.' The civil and common law do not differ in this respect; the thmg deposited must be restored to the joint owners or proprietors making the deposit. But if the bailee accepts the property from one of them, by whom as well as by the bailee it is treated as be- longing to him exclusively, he will be protected by a redelivery of the property to him who bailed it.^ § 57. The civil and common law approximate each other so nearly in respect to the obligation of the depositary relative to his duty to rede- liver the subject of bailment, that it may be proper to mention briefly the provisions of the Code of Louisiana, which is in substance the civil law. The depositary by this Code must restore the thing deposited only to him who delivered it, or m whose name the deposit was made, or who was pointed out to receive it. He cannot require him who made the deposit to prove that he was the owner of the thmg. Yet if he discovers that the thing was stolen, and who the owner of it is, he must give him notice of the deposit, requiring him to claim within due time. If the owner, having received due notice, neglects to claim the deposit, the depositary is fully exonerated on returning it to the person from whom he received it. If the person who made the deposit be deceased, the thing deposited can be restored only to his heir ; if there be several heirs, it must be delivered to each of them for his respective part and portion, unless the thing deposited be indivisible, in which case they must agree among themselves. "Where the depositor has changed con- dition, as if a woman marries, or a person of full age falls under inter- diction, the deposit can be restored only to the person who has the administration of the rights and property of the depositor. Where the deposit has been made by a tutor, a husband, or by any other adminis- trator, it can be restored, after the function of that administrator had ceased, only to him whom he represented. When the contract specifies a place where the deposit is to be restored, it must be delivered at that place, but the expense of conveyance to the place of delivery must be borne by the depositor. If the contract does not specify the place where the deposit must be restored, it is to be restored at the place where such deposit has been made ; and it must be restored as soon as it is de- 1 Jones on Bailm. 51; Brandon v. Scott, 40 Eng. L. & Eq. 105; Mitchell v. Williams^ 4 Hill N. T. 13; Jessop v. Miller, 1 Keyes, 321. ^ May V. Harvey, 13 East. 1!j7. Deposits. 53 manded, even though the time for its restoration stipulated for has not arrived. The depositary is not allowed to retain the goods deposited on any pretence of a debt due him from the depositor, by way of offset, but he may retain it for any advances made arising from the deposit.^ § 58. Under the common law, if the bailee refuse to deliver goods on demand made by the depositor, or does any act by which he acknowl- edges to hold them for a third person, he is responsible for a conversion of the property, and after having done so, the agent placing his refusal upon the absence of his principal, the bailee cannot claim to hold on the ground of lien for storages and charges paid. So, if he receive them for a particular purpose and transfer them in contravention of that purpose, even though it be to a bona fide purchaser, without notice, the latter cannot resist the claim of the owner. ^ So closely is the depositary held to the execution of the terms of his contract, that it has been asserted that where goods are delivered to a bailee, to be delivered over to another, and afterwards an action is brought by a person having a right to the goods, the defendant may, pending the action, deliver over the property to the person to whom it was delivered, and thereby discharge himself.' But the bailor, in cases of naked bailment, has the right to countermand his bailment ; and after that, the delivery by the bailee will not be good. The right of countermand arises out of the gratuitous nature of the contract.* Where the bailee has delivered the goods to a second bailee, he has the right to demand and recover them ; and the original bailor has the same right of re- covery from either bailee, because he has the property, and both are bound to answer him.^ And it was formerly held, that where the second bailee delivers the goods to the original bailor, it would be no bar to a suit by the first bailee against him. But this doctrine is now entirely exploded by later authorities.^ § 59. After a legal demand has been made by the bailor, the bailee must answer for any loss or casualty that may happen to the goods ; unless, perhaps, in cases where it may be strongly presumed that the 1 Code of Louisiana, Art. 2920 to 2927. As to the obligations of a depositary under the California statutes, see Cal. Civil Code, §§ 1822-1827. A naked bailee cannot be held liable for a delivery to the wrong person where the agent of the person entitled to the property has given him to understand that it was for the one to whom it was delivered. Brant v. McMahon, 56 Mich. 498. 2 Holbrook v. Wight, 24 Wend. 169; Wilkinson v. King, 2 Camp. N. P. C. 335; 2 Stark. N. P. C. 311; Medlin v. Wilkerson, 81 Ala. 147; Gottlieb v. Hartman, 3 Col. 53. ' Bac. Abr. Bailm. D. * Winkley v. Foye, 33 N. H. 171. 6 Isaac V. Clark, 2 Bulst. 306, 312. « Agle V. Atkinson, 5 Taunt. 759; Whittier v. Smith, 11 Mass. E. 211. 54 Law of Bailments. same accident would have befallen the thing bailed, even if it had been restored at the proper time. At common law, the general rule is that a refusal to deUver on demand, or at the time or place stipulated, will be received as evidence of a conversion of the property, which will render the bailee liable for its value.^ "Whatever acts amount to a con- version of the property, or a denial of the bailor's rights over it, will render the bailee from that time absolutely responsible for it, and cast upon him all the risks that may afterwards attend the property.^ Of course a sale or misuse of the goods bailed will render the bailee liable for them ; by selling them he makes himself guilty of a breach of faith, which renders him liable for their full value ; by any misuse of the goods, equivalent to a denial of the owner or depositor's rights m them, the bailee makes himself responsible for the property. § 60. A conversion of the goods by the depositary instantly confers upon the owner or depositor a right of action to recover the value of the property ; and this right of action is not impaired by the subse- quent loss or injury of the goods. The law will not allow the baUee to escape from his liability for the wrongful conversion of the property, on the ground of misfortune in his subsequent dealings with it. As a wrong-doer he must bear the consequences of his tortious act from its date,* and in some cases forward even to the day of trial.* Certainly the rule of damages gives to the owner not less than the value of the goods, with interest from the time of the conversion.^ When the depositor does not know of the conversion until some time afterward, and the value of the goods converted is uncertain or fluctu- ating, it is not unreasonable to give him the value of his goods when he calls for them ; nor can it be said that this rule operates inequitably towards the wrong-doer ; because he received and held the goods under a contract binding him to redeliver them on demand, and cannot reason- ably claim a discharge from his contract on the ground of his own previous tort. A man wrongfully takes and converts your timber into boards or shingles; and being sued in trover for the manufactured article, he cannot show the conversion of the timber in answer to your demand for the boards or shingles ; he is not allowed to antedate or carry back his wrongful act to relieve himself of its burden.' 1 Brown v. Cook, 9 John. E. 361; May v. Harvey, 1.3 East. 197. 2 Sargent t. Gile, 8 New Hamp. Rep. 325. 8 Collins V. Bennett, 46 N^. T. 490; Woodman v. Hubbard, 25 X. H. 67. iRomaine v. Van Allen, 26 N. T. 309; Burt v. Dutclier, 34 N. Y. 493; MarkhamT. Jaudon, 41 N. T. 237. See on rule of damages, Baker v. Drake, 53 N. Y. 211. ^ Brizsee V. Jlaybee, 21 Wend. 144; Andrews v. Durant, 18 N. Y. 496. " Brown v. Sax, 7 Cowen, 95; Baker v. Wlieeler, 8 Wend. 305; Curtis v. Groot, 6 Deposits. 55 § 61. A restoration of the goods, after an act of conversion, does not take from the owner his right of action; he may still maintain the action of trover, and recover in it his actual damages.^ The wrong-doer cannot annul the consequences of his wrongful act by an offer to re- store the chattel, or by an actual return of the property.^ The owner may stUl recover the damages he has sustained in consequence of being deprived of the use of his property; or even special damages, the direct and natural consequence of the wrongful act.'' Time lost and labor spent in searching for the property taken or appropriated, may be recovered in the form of damages.^ A decrease in the value of the goods from the delay, may be also recovered.^ § 62. It is the depositary's duty to restore the goods on demand, and where he fails to do so he is bound to render some account of them ; the omission to redeliver naturally calls upon him for some explanation. The form of the action affects to some extent the burden of proof. In the action of trover, an unexplained refusal to restore the goods is evi- dence of a conversion — evidence from which the jury may find the fact of a conversion f it is therefore suflB.cient to cast the burden of proof upon the defendant ; and thus compel him to show a loss of the goods without fault on his part.' In an action founded upon the bailee's con- tract, the plaintiff must prove the contract and the breach or faUure to redeUver ; the burden of proof is then cast upon the bailee to show due diligence in the custody or keeping of the goods, or a loss of them not- withstanding such diligence ; this is clearly the rule in actions brought against a depositary for hire, and the reason of the rule applies with equal force in actions against a bailee without hire.* When the property John. R. 168; Babcock v. Gill, 10 John. 287; Rice v. HoUenback, 19 Barb. 664; Salis- bury v. McCoon, 3 N. T. 379. See Guckenheimer v. Ajigevine, 81 N. T. 394,397; Gavin v. Gleason, 105 IST. T. 256, 261; Newton v. Porter, 69 N. Y. 133, 136, 137; Fir- min V. Firmin, 9 Hun, 571. 1 Reynolds v. Shuler, 5 Cowen, 323; Livermore v. Northrup, 44 N. Y. 107; Carpen- ter V. Manhattan Life Ins. Co., 22 Hun, 47; Barrelett v. Bellyard, 71 111. 280. 2 Hanmer v. Wilsey, 17 Wend. 90, 93; Otis v. Jones, 21 Wend. 394. See ante, § 42; Stephens v. Koonce, 103 N". C. 266. 8 Woodruff V. Cook, 25 Barb. 505; Bennett v. Lockwood, 20 Wend. 223. * McDonald v. North, 47 Barb. 530; and see Clinton v. Townseud, 46 How. Pr. 42. 5 Rowley v. Gibbs, 14 John. 385; Suydam v. Jenkins, 3 Sand. 614. « 2 Greenleaf s Ev. §§ 644, 645; Bradley v. Spofford, 3 Foster, N. H. 444. ' 'Wellington v. Wentworth, 8 Met. 548; Collins v. Bennett, 46 N. Y. 490; Caldwell T. Nat. Mohawk Valley Bank, 64 Barb. 333; Ouderkirk v. Central Nat. Bank, 119 N. Y. 263; Taussig v. Schields, 26 Mo. App. 318; Gleason v. Beers, 59 Vt. 581. See Stewart v. Stone, 127 N. Y. 500, 506. 8 Arent v. Squire, 1 Daly, 347; Schwerin v. McKie, 5 Robertson, N. Y. S. C. 404, 419, and cases there cited; Goodfellow y. Meegan, 32 Missouri, 280; Ouderkirk v. Central Nat. Bank, 119 N. Y. 263, 267; Hayes v. Kedzie, 11 Hun, 577. 56 Law of Bailments. is returned in a damaged condition, that is, injured in such a way or to such an extent as does not ordinarily occur without culpable negligence, it rests with the bailee to show how the injury occurred, and that he was not guilty of the negligence that caused it.^ The rule here rests upon two grounds : first, the facts relating to the uijury are peculiarly within the knowledge of the bailee, and second the injury is of such a nature that it does not usually occur without neghgence on the part of the custodian.^ It follows that the burden of proof is not cast upon the bailee where the injury is of such a nature that it might well occur in the ordinary course of things, or where the loss appears to have arisen under circumstances consistent with due diligence.^ "When the trial commences, the burden of proving negligence rests with the party alleging it as the ground of his action or defense ; the amount of proof required to establish the fact, 7_)r/»ia/acie, depends very much upon the circumstances attending the transaction.* § 63. As against the true owner, the bailee holdmg property on deposit gratuitously does not stand in any better condition than the bailor ; since the true owner may follow and take the property in whose hands soever it may be f omid.^ Against every other person, the general prin- ciple is, that actual and lawful possession gives a right of action to the person holding personal property, for its protection." It was formerly considered that the plaintiff in such cases must show a special property in the goods claimed, in order to maintain the action ;' but that doctrine has been recently so far modified as to give the bailee, or person in pos- session, a right of action against all persons who wrongfully interfere with the goods. § 64. Wherever the goods or chattels pass into the hands of the bailee under a written contract, by the terms of which they are deliverable on demand at a particular place, the bailor cannot recover them until they have been properly demanded according to the contract ; neither can he 1 Collins V. Bennett, 46 N. T. 490, 494. In this case the horse in question was foundered and rendered worthless while in the bailee's possession. McDaniels v. Robertson, 26 Vt. 340; Arnot v. Branconier, 14 Mo. App. 401. 2 Cairnes v. Eobbins, 8 Mees. & Wels. 258; Rose v. Hill, 2 Man. Gr. & Scott, 787. 3 Piatt V. Hibbard, 7 Cow. 497; Watson v. Bauer, 4 Abb. Pr. N. S. 273. * Lamb v. Camden & Amboy R. &. T. Co., 46 N. T. 271, 279; Russell Manul. Co. v. New H. S. Co., 50 N. T. 121, 120. 5 Cook V. Holt, 48 N. T. 275; Calhoun v. Thompson, 56 Ala. 166. 6 Armory V. Delamirie, 1 Str. 504; Fisher v. Cobb, 6 Vermont R. (522; Sutton v. Buck, 2 Taunt. R. 302; Miller v. Adsit, 16 Wend. 305; 5 Taunt. 579; White v. Webb, 15 Conn. E. 302. ' Templanev. Case, 10 Mod. R. 25; 5 Mass. R. 304; Hoyt v. Gelston, 13 John. K. 151, and 14 do. 131. Deposits. 57 require their delivery at any other place than that specified. If no place is specified for their delivery, they are deliverable at the place of deposit, and the bailee cannot be required to produce them at any other place, unless he has voluntarily stipulated to do so.^ As in other cases, the contract regulates the place and mode of the delivery, and the time or event on the occurrence of which it is to be made. § 65. Right to Use. How far the bailee's right to use the goods or chattels deposited with him goes, depends upon the circumstances of the case. If the property is bailed with the evident intention that it shall be used, its use will not impose upon the bailee any additional obUga- tion.^ It is laid down as a general rule that the depositary has no right to use the thing deposited, except in those cases where its use may be necessary for the preservation of the deposit, or where the consent of the depositor may be reasonably presumed. If he use the thing de- posited, in cases where no such consent can be inferred, the bailee is answerable for all casualties.' There are many instances in which this consent to the use of the subject of bailment will be presumed. The civil and common law agree that the depositary cannot make use of the thing deposited, without the express or implied permission of the de- positor.* The bailee, it should seem, may use moderately &• horse left in his custody, may milk a cow left in his possession, or use the books of a friend deposited in his library ; such use is not injurious to the property, and is sometimes very useful for its preservation.^ If the bailee derive profit or advantage from such use of the property deposited with him, he is, at least under the civil law, answerable for the value of such use ; the effect of such use must, therefore, under that law operate to change the nature of the contract into a bailment for hire, thus en- hancing the degree of care and diligence required of the bailee. § 66. The naked depositary ought neither to be injured nor benefited in any respect by the trust undertaken by him ; in an emergency, he has an implied authority to incur expenses on behalf of the owner for the preservation of the property; and where he is himself at some 1 Brown v. Cook, 9 John. E. 361 ; Phelps v. Bostwick, 22 Barb. 314. 2 De Fonoleaa: v. Shottenkirk, 3 John. E. ItO. 3 1 Cowen's Trea. 71, 3d ed.; Beach v. R. & Del. Bay Co. 37 IST. Y. 457; Collins v. Bennett, 46 N. T. 490; Lane v. Cameron, 38 Wis. 603. The California Code provides that a depositary may not use the thing deposited, or permit it to be used for any pur- pose, without the consent of the depositor; and that a depositary is liable for any damage happening to the thing deposited during his wrongful use thereof, unless such damage must inevitably have happened though the property had not been thus used. Cal. Civil Code, §§ 1835-1836. ■• Code of Louisiana, Art. 2911 ; Bac. Abr. Bailm. D. ; 2 Kent's Comm. 568. ^ Story on Bailm. § 89; Jones on Bailm. 81. 58 Law op Bailments. expense in keeping the property deposited with him, he may without doubt make use of it ui a reasonable manner by way of compensation for the charge.i Is his liability increased by reason of his making use of the deposit, the use being less in value than the expenses incident to its custody ? The bailment here is not wholly gratuitous, and yet on the whole the bailee acquires no advantage from it ; he is but partially paid for his services. It seems, however, that he is bound to the use of ordinary care ; '"■ the related rules of law give strength to this impres- sion.' Where the thing deposited is of such a nature that it imposes no charge upon the depositary in the keeping of it, as in the case of a de- posit of jewels, no doubt can arise ; if the bailee wear them, he will be Uable for their loss ; liable because he exposed them to the danger of loss, and by so doing was guilty of an act of conversion. § 67. A deposit of articles shut up in a box, or under a sealed cover, should not be examined by the depositary, since he should not seek to know what the depositor has concealed from him.^ If the things de- posited be locked up in a box or chest, or enclosed in a wrapper under seal, this circumstance would imply that they are not to be used ; books, jewelry, pl»te or pictures deposited hi this manner should be retained carefully in the condition in which they are received.'' So also if the goods are of such a character as to be impaired by usage, they must not be used ; since it cannot be presumed that the owner intended to place them at the disposal of the depositary for his own advantage. The presumption would be different with respect to such things as would be very little if at all injured by use, as books left with a friend neither boxed nor locked up, in the use of which even moderate care would pre- vent them from being injured." Still the general doctrine seems to be that the depositary, who uses the thing bailed with him, is responsible if it be lost or injured while it is so used ; the use so far affects the con- tract as to make it partake of the nature of a loan, and thus casts upon the depositary the increased responsibility of the borrower, who must answer for any accident which a very careful and vigilant man could have avoided. If the use be without either the express or implied con- sent of the depositor, the law is that the depositary is liable in any iHarter v. Blanchard, 8 Albany Law Journal, 12, 13; 64 Barb. 617, opinion by Smith, J. 2 Newhall v. Paige, 10 Gray (Mass.) 366. " Smedes v. Utica Bank, 20 John. R. 372; 3 Cowen, 663; Bank of Utica v. McKins- ter, 11 Wend. 473; Eobinson v. Smith, :j Paige, 222; 1 Edw. Ch. 513, 543. * Code of Louisiana, Art. 2914; Cal. Civil Code, § 1835. 5 Story on Bailments, § 90. « Jones on Bailment, 81 ; 2 Ld. Kaym. 917. Deposits. 59 event of loss or damage ; he becomes thereby guilty of such a violation of his contract or trust that he must answer for any and every mis- chance. Such authorized use of the goods for his own convenience, by which they are exposed to the dangers of injury or loss, justly imposes on the bailee the duty of answering for them in any event.^ § 68. The person making a deposit must reimburse the depositary the money he has advanced for the safe keeping of the thing, and in- demnify him for all the deposit has cost him. He must also indemnify the depositary for the losses which the thing deposited may have occa- sioned him ; ^ this is the rule of the civil law, and it would seem to be equally good at common law. Under the civil law such advances or losses became a lien upon the chattels in deposit, but at common law no lien attaches for such a demand ; " it is, it would appear, only a right of action, though it would doubtless be more equitable to allow a lien in such cases. If the baUee come into the possession of the property by finding, and the owner offers a reward for the restoration of it to him, the reward becomes a lien on the property.* § 69. The bailee has no right to pledge goods deposited with him for an advance of money ; that is a use of the property not authorized by law, in direct violation of his contract. The owner in such a case may follow and recover the property in whose hands soever if may be found. The action of trover lies against the person in possession, who refuses to deliver up the goods,* and thereby converts them to his own use. The transfer to him being wrongful, he acquires no greater right over the property than was possessed by the original bailee. Whatever special property the bailee acquires in the goods, his right and control over them are limited by the terms of the contract under which he has them in custody. He has, it would seem, only a possessory interest in them,' and, strictly speaking, no right of property. The law gives him an interest sufficient to carry out and accomplish the purposes of the contract,'' which extends to the defense of the property by action against any and all persons who may interfere with it, but does not include the right to bestow it or make use of it in any way not evidently contem- plated by the parties to the contract of bailment. § 70. Goods in the possession of one who has only the custody of 1 3 Atk. K. 44. " Code of Louisiana, Art. 2931 ; Jones on Bailm. 47. 8 Story on Bailm. § 121 ; Nicholson v. Chapman, 2 H. Black. R. 254; Amory v. Myn, 10 John. 103; Harter v. Blanchard, 64 Barb. 617. * Wentworth v. Day, 3 Mete. K. 325. ' Hartop V. Hoare. 3 Atk. E. 44; Waterman v. Robinson, 5 Mass. R. 303. 6 Commonwealth v. Morse, 14 Mass. E. 217. ' Giles V. Grover, 6 Bligh E. 277; Story on Bailment, § 93. 60 Law of Bailments. them for the time being, as where they are in the keeping of the owner's servant, and he delivers them for safe keeping into tlie hands of a depositary, must be redelivered to the owner on demand. Until a demand is made or notice given, the depositary will be protected in the act of restoring the goods to the person from whom he received them ; this at least is the principle of the civil law, under which the bailee, if he discover that the goods were stolen, or who the true owner of them is, must give notice to him of the deposit, requiring him to make his claim in due time.^ If this is not done, he is at liberty to restore the goods to the bailor. At common law the owner of stolen property may follow it and retake it in whose hands soever it may be found.^ Though possession of personal property is prima facie evidence of title, it may be overcome by positive testimony ; and since on every sale of personal chattels there is an implied warranty of the title to them, the remedy of the mnocent purchaser of stolen property is by an action against the vendor. The title of the owner cannot be divested by the action of third persons without his concurrence or such neglect on his part as induces the purchaser to part with value for the same. An exception to this general rule exists in England, in respect to sales made in market overt ; but the exception is not recognized in this State.^ Even an auctioneer who sells stolen goods is liable to the owner in an action of trover, notwithstanding the goods are sold and the proceeds paid over to the thief without notice of the felony.'' The exception in England, just mentioned, founded on a custom which prevailed princi- pally in the city of London, has always been regarded and restricted by the courts, with unusual jealousy and vigilance.'* In the origin of the custom, sales in fairs or markets overt were regulated with great strict- ness, so as to give to them the utmost publicity and surround them with every circumstance of openness and fair dealing." As we have in this State no such market, sales here have no other effect than mere private sales in England.' § 71. The rule is different where property has been acquired by a 1 Code of Louisiana, Art. 2921; Cal. Civil Code § 1826. 2 Cowen's Trea. 3d ed. ,329; Rogers v. Weir, 34 X. T. 463, 468; Newton v. Porter, 5 Lans. 416; Bassett v. Spofiord, 45 N. T. 387; Breokenridge v. McAfee, 54 Ind. 141; Courtis V. Cane, 32 Vt. 232. 3 Hoffman v. Carow, 20 Wend. E. 21; S. C. 22 Wend. 285; Barnard v. Campbell, 55 N. T. 456, 462; Mowrey v. Walsh, 8 Cow. 238; Levi v. Booth, 58 Md. 305; Dame v. Baldwin, 8 Mass. 518. * Hoffman v. Carow, 20 Wend. E. 21. ^ Wheelright v. Depeyster, 1 John. E. 480. « 2 Black. Comm. 449, 450. ' Mowrey v. Walsh, 8 Cowen E. 238. Deposits. 61 fraudulent purchase, which, though void as between the parties, confers upon the vendee the possession of the property, and thereby enables him to dispose of it to a bona fide purchaser for value. In this case the pur- chaser in good faith holds by a title superior to that of the original owner ; since the latter by parting with the possession has armed the fraudulent vendee Avith the evidence of title, and thus enabled him to appear as the owner in a sale of the property.^ He has made a delivery with an intent to pass the title, and after that he is not permitted to follow and retake the goods from the hands of an innocent purchaser, or pledgee who has made advances upon them in good faith.^ § 72. It is seldom that a depositary can defend himself from liability by showing a delivery to a wrong party ; because, as a general fact, he knows or has the means of ascertaining the true owner. Prima facie therefore he is liable for a misdelivery, like a bailee for hire.' The return of the goods to the owner is so essential in the discharge of his obligation, that the law will not lightly excuse the bailee from its per- formance ; but where the goods came into his possession through the owner's neglect, and he does not know to whom they belong or by whom they were left, it seems he discharges his duty by the exercise of all reasonable care and vigilance in the delivery of them to a claimant describing so as to identify the goods.* .As a gratuitous bailee he is not liable for the goods where they are lost without gross negligence on his part ; but while it may be possible for him to excuse a loss by a misde- , livery, where he is not chargeable with want of due care, it is quite clear that in the affirmative duty of redelivering the goods, he must act with prudence and discretion.* § 73. The law always aids the true owner to recover his property ; and it is a general rule that the bailee cannot dispute the title of his 1 Andrew v. Dieterick, 14 Wend. E. 31; Paddon v. Taylor, 44 N. T. 371; Simpson V. Del Hoyo, 94 X. T. 189; Winne v. McDonald, 39 N. Y. 233. 2 Andrew v. Dieterick, 14 Wend. R. 31; Mowery v. Walsh, 8 Cowen R. 238; Root V. French, 13 Wend. R. 570. 8 Coffin V. Henshaw, 10 Ind. 277; James v. Greenwood, 20 La. Ann. R. 297; Nelson V. King, 25 Texas, 655; Esmay v. Fanning, 9 Barb. 176; Brandon v. Scott, 40 Eng. Law & Eq. 105; Colyar v. Taylor, 1 Cold well (Tenn.) 372. * Morris v. Third Ave. R. Co., 1 Daly, 202. In this case the railroad company, tak- ing up a satchel left in a car, was treated as a bailee for hire; and a verdict was ren- dered against the company for the property on the ground of a want of due care, not- withstanding the satchel had been honestly delivered to a claimant. Tabor v. Gard- ner, 6 Abb. Pr. IST. S. 147. ' Skelly V. Kahn, 17 111. 170. In this, a case of mandate, the bailee was not allowed to excuse the loss of a sum of money by showing that he handed it to a boy for delivery. A carrier cannot excuse a misdelivery, by showing an honest delivery on a forged order. Powell v. Myers, 26 Wend. 591. 62 Law of Bailments. bailor. When therefore the bailee is applied to for the property by a third party claiming title, his prudent course is to leave the claimant to his action, and at once notify his bailor of the suit ; he is not obliged to bear the burden of a litigation ; and it is not safe for him to surren- der the property on demand.* For nothing will excuse a bailee from the duty to restore the property to his bailor, except he show that it was taken from him by due process of law, or by a person having the paramount title, or that the title of his bailor has terminated.^ By sur- rendering the property on demand to a third party, the bailee assumes the burden of establishing the title he thus acknowledges. 1 Welles v. Thornton, 45 Barb. 390; Roberts v. Stuyvesant S. D. Co., 123 N. T. 57. 2 Bates T. Stanton, 1 Duer, 79; Van Winkle v. U. S. Mail S. Co., 37 Barb. 122; Bliven V. Hudson II. R. Co., 36 N. Y. 403; 35 Barb. 191; Burton v. Wilkinson, 18 Verm. R. 186; Aubery v. Fiske, 36 X. Y. 47; McKay v. Draper, 27 N. Y. 256; Sinclair V. Murphy, 14 Mich. 392; Osgood v. jSTichols, 5 Gray, 420; Stiles v. Davis, 1 Black, 101; Pulliam V. Burlingame, 81 Mo. Ill ; Roberts v. Stuyvesant Safe Deposit Co., 123 K. T. 57. The bailee may always show an assignment of the title of the bailor to a third person. Roberts v. J^oyes, 76 Me. 590. He may also show in justification of non- delivery to the bailor that the true owner compelled a delivery to himself of the goods bailed by legal process and that the bailor was immediately notified of the taking. Bliven v. Hudson River R. R. Co., 36 N. Y. 403; The Idaho, 93 U. S. 575. Where property in the custody of a bailee for hire is demanded by third persons imder color of process, it becomes the duty of the bailee to ascertain whether the process is such as requires him to surrender the property, and if it is not, then it is his right and duty to refuse and to offer such resistance to the taking, and adopt such measures for re- claimiag it, if taken, as a prudent and intelligent man would if it had been demanded and taken under a claim of right to the property by another without legal process. Roberts v. Stuyvesant Safe Deposit Co., 123 N. Y. 57. The mere levy of an execution or attachment upon property by a creditor of the owner while in the possession of a tort feasor is no defense in an action against the bailee. Id. And see Barnard v. Kobbe, 54 N. Y. 516. Gkatuitous Commissions. 63 CHAPTER ITT. GRATUITOUS COMMISSIONS OR MANDATES. § 74. Nature of the Contract. The difEerence between a contract of bailment by deposit without reward, and that species of contract known as a mandate, is not very broad, and does not so much concern the nature of the contract as the mode of its performance. A mandate is a bailment of goods without reward, to be carried from place to place, or to have some act performed about them. The leading case of Coggs v. Bernard^ decides, that where a man undertakes to carry goods safely and securely, he is responsible for any damage they may sustain in the car- riage through his neglect, though he was not a common carrier and was to have nothing for the carriage. An executory contract of this kind cannot be enforced, since it wants a consideration to support it ; it is an agreement to perform an act in the future, without any compensation promised or received, and it cannot be enforced in an action. But when the contractor actually enters upon the performance of the work contracted to be done, he is bound to perform it in a careful and work- manlike manner, and is responsible for neglect. A negligent perform- ance of the imdertaking by which the property is injured creates a lia- bility for the loss occasioned.^ The owner's trusting the bailee with the goods is held a sufficient consideration to obUge him to a careful management. § 75. Subject of the Contract. The subject matter of the contract of mandate, as in the contract of bailment by deposit, must be personal property, the custody of which is, for the time being, given into the hands of the mandatary.^ In the civil law, the contract might arise in respect to real property, as well as in cases where no property at all was concerned. What we term an agency, or a contract to perform certain specific work, was 1 2Ld. Eaymd. 909-913; Jones on Bailm. 53; 2 Kent's Comm. 569. In the case of a mandate, the labor and services are the principal objects of the parties, and the thing is merely accessorial. ^ Melbourne v. Louisville & N. R. Co., 88 Ala. 443. ' Story on Bailm. §§ 144, 145. 64 La^v of Bailments. termed mandate in the civil law; and the contract included a great variety of undertakings with respect to property, the custody of which was not transferred. A gratuitous agency constituted the contract, as to purchase a given piece of property, or to perform a particular piece of work. The obligations involved were similar to those imposed by our law under the same circumstances, but the classification is dif- ferent. § 76. The Code of Louisiana makes the contract of mandate to arise in five different manners : for the interest of the person granting it alone ; for the joint interest of both parties ; for the interest of a third person; for the interest of such third persons and that of the party granting it ; and finally for tlie interest of the mandatary and a third person. It is in form and effect a commission given by the mandator to another to transact for him, and in his name, one or several affairs. The object of the mandate must be lawful, and such as the mandator has the right to accomplish, and the contract is completed only by the acceptance of the mandatary.^ Unless a compensation is agreed upon, the services are presumed to have been rendered gratuitously. In fact, the services are generally compensated under the Code of Louisiana, as is manifest from the great variety and matters of agency comprehended under this contract. In general, whatever may be committed to another by a procuration or power of attorney, is there embraced under the contract of mandate, sometimes in general terms to include all affairs, and again limited to one affair alone. In respect to the performance of this contract, the mandatary is un- der that code responsible not only for unfaithfulness in his management, but also for his fault or neglect. But his responsibility with respect to faults is enforced less rigorously against the mandatary acting gratui- tously, than against him who receives a reward.^ A broker is by the same law classed as a mandatary, who is employed to negotiate a matter between two parties, and is for that reason regard- ed as the mandatary of both,^ to whom he owes the same fidelity. His obligations and duties do not seem to differ very greatly from those im- posed upon brokers and auctioneers under the common law.^ The compass of this contract under the civil law, it is evident from what has been said, embraces a much wider range of subjects and rela- tions than are uicident to the contract of mandate at common law. We have appropriated from that code only a single class of principles, appli- 1 Code of Louisana, Art. 2954, 2955, 6, 7. 2 Idem, -Jirrl. ^ Idem, i:!l,S5. •* Co \- tf Louisiana, Art. 2986, 7, 8. GEATTTITOtrS COMMISSIONS. 65 cable to duties in respect to which, our law was silent. We borrowed only such as we had need of, making them ours from time to time as an occasion arose, in the same manner as we have incorporated much of the civil law into our equity jurisprudence. § 77. Feasance and Non-feasance. The main distinction between a mandate and a deposit is that the former lies in feasance, and the latter simply in custody. The duties of the depositary are not so active as those of 'the mandatary ; they do not require so much vigilance. A mandatary, like an unpaid agent, engages to use a degree of -diligence and attention adequate to the performance of his undertaking; and though not bound by his original promise to enter upon the execution of the commission, he is bound, after having actually entered upon the business, to exert himself in proportion to the exigency of the matter in hand. This rule has been enforced where an agent without reward undertook to obtain an insurance on a vessel, and did the business so carelessly that the benefits derivable from the policy were lost.^ In our law the contract ^f mandate is connected with a bailment or delivery of property : it was not so limited in the civil law.^ And there is a class of cases in which, without any delivery of goods or property, an unpaid agent is held responsible for the use of diligence in the busi- ness he undertakes ; as where a man receives a demand to collect gratis, or where a surgeon undertakes an operation without hire. The effort to collect must be made with ordinary diligence ; ' and the operation must be performed with ordinary skill.* The existence of a valid con- tract between the parties, founded on a consideration, is not essential to support an action for the misfeasance.^ 1 Mallougli V. Barber, 4 Campb. 150; Park v. Hammond, 4 Campb. 344. A right to commissions for tlie service may affect the question. Nellis v. De Forest, 16 Barb. 61. See the opinion by WoodWOEth, J., 20 John. R. 378; and Coggs v. Bernard, 2 Lord Raym. 910. 2 Hadley's Introduction to Civil Law, 207, 232. ^ Moore v. Gholson, 34 Miss. 5 George, 372. * Carpenter v. Blake, 60 Barb. 488; S. C. 50 K. T. 696; 10 Hun, 358; 75 ]Sr. T. 12; McKevins V. Lowe, 40111. 209; Craig v. Chambers, 17 Ohio St. 253; Haire v. Keese, 7 Phil. Pa. 138; Howard v. Grover, 28 Maine, 97. 5 Pippin V. Shepard, 11 Price, 400; Gladwell v. Steggall, 5 Bing, N". C. 733; 6 Exch. 767. The employment or retainer need not have been by the plaintiff. Peck v. Martin, 17 Ind. 115. The same degree of care and skill is required of a surgeon whether he serves gratuitously or for compensation. Becker v. Janinski, 27 Abb. N. C. 45; Harris v. "Woman's Hospital, 27 Abb. N. C. 37. One who offers himself for employment in a professional capacity undertakes that he possesses that reasonable degree of learning and science which is ordinarily possessed by the professors of the same art or science, and which is ordinarily regarded by the community and those con- versant with the employment as necessary to qualify him to engage in such business; 5 66 Law op Batlmbnts. The distinction taken at an early day between >(on-feasance andww- feasance by a mandatary, is founded in the principle that though a per- son cannot be compelled to enter gratuitously upon the business of another, yet when he once takes it upon himself by beginning the work, he becomes responsible for any damages that may arise through his negligence or want of care. A non-feasance is a failure to perform ; and a misfeasance is the performance in an improper manner of some act which it was his duty, by contract or otherwise, to have done, or of some act which he had a right to do. The common law does not enforce a mere naked promise. Hence a mandatary, or one who undertakes to do an act for another without re- ward, is not answerable for omitting to do the act, and is only liable when he attempts to do it and does it amiss. In other words, he is responsible for a misfeasance, but is not answerable for a non-feasance, even where special damages are averred. This rule was applied where one of two joint owners of a ship voluntarily undertook to get the ves- sel insured, but neglected to do so, and the ship was lost. He was not held liable, because he had not come under a legal obligation.' Receiv- ing property into his hands, under a j)romise to do some act in relation that he will use reasonable and ordinary care and diligence in the exercise of his skill and the application of his knowledge to accomplish the purpose for which he is employed ; and to use his best judgment in the exertion of his skill and the application of his diligence. Carpenter v. Blake, 10 Hun, 358; S. C. 75 N. T. 12. A surgeon is not liable for a want of the highest degree of skill in the performance of an operation ; but only for the want of ordinary skill, and for the want of ordinary care and judg- ment : held in respect to an alleged error in not removing more of a diseased thigh bone. Howard v. Grover, 28 Maine, 'J7. The law allows the practice of any system of medicine ; /. e. , it does not prohibit the practice of any ; but it does imply an under- taking on the part of every medical practitioner that he will use an ordinary degree of care and skill in his practice, according to his avowed system. Bowman v. Woods, 1 Greene, Iowa, 441; Commonwealth v. Thompson, 6 Mass. 1.34; White v. Carroll, 42 N. Y. 161; Haire v. Eeese, 7 Phil. Pa. l;jS; McNevins v. Lowe, 40 111. 209. The burden of proof in a suit for malpractice is on the plaintiff. Craig t. Chambers, 17 Ohio St . 258. In England and in some of the States, the law requires that medical practitioners shall be licensed; and allows only a licensed physician to recover for medical services. Biblin v. Simpson, 59 Maine, 181; Wragg v. Strickland, 36 Ga. 559; De La Rosa v. Prieto, 16 Com. B. (N. S.) 578. The same rule formerly existed in this State. Bailey v. Jlogg, 4 Denio, (10. It was for a time abrogated and subsequently revived. See Laws of 1880, Chap. 513; Fox v. Dixon, 34 State Eep'r 710. At pres- ent our law recognizes no particular school of medicine as the legal or authorized system. White v. Carroll, 42 N. T. 161. A man who does not profess to be a physician nor to practice as such, and is merely asked his advice as a friend or neighbor, does not incur any professional responsibility. Eitchey v. West, 23 1)1. "<>, cited in 40 111. 210. 1 Thorne v. Deas, 4 John. E. 84. Leading case; opinion by Ch. J. KExr. Geattjitous Commissions. 67 to it, creates a legal duty. Thus, a bank by receiving a note for collec- tion, where it is to receive no direct compensation for the service, be- comes bound to a faithful and diligent performance of the undertaking.^ Under the common law the engagement is not considered a gratuitous undertaking, because of the average deposits accruing to the bank on account of such collections. Under the civil law it is treated as a bail- ment without reward, and the mandatary is held bound by the same obligation. The duty of the mandatary, though not placed on the same ground, is enforced with equal strictness under both systems.^ § 78. Mule of Diligence. A mandatary is answerable for the same degree of diligence as a depositary ; he must use such care as men of common sense and common prudence, however inattentive, ordinarily take of their own affairs, of a like kind ; that slight or moderate degree of care which men naturally take of their own goods. He is not liable for a loss or injury, unless it happens through his gross negligence or bad faith. Like many other principles of law, this rule must be understood with reference to the article, the nature of the trust, and the circumstances attending its execution.'' § 79. The supposed case of the diamond ring illustrates the principle which fixes the degree of care demanded of the mandatary ; for instance, if Stephen desire Philip to carry a diamond ring from Bristol to a person in London, and he put it with bank notes of his own into a letter case, out of which it is stolen at an mn, or seized by a robber on the road, Philip shall not be answerable for it ; although a very careful, or per- haps a commonly prudent man would have kept it in his purse at the inn, and have concealed it somewhere in the carriage ; but if he were to secrete his own notes with peculiar vigilance, and either leave the dia- mond in an open room, or wear it on his finger in the chase, he would be bound, in case of a loss by stealth or robbery, to restore the value of it to Stephen.^ In general, the fact that the party did the work on the subject of the bailment with the same care that he- did the work on like goods of his own, will repel the imputation of negligence.^ This pre- sumption may, without doubt, be overcome by proof of actual neghgence, 1 Smedes v. Utica Bank, 20 John. 372; S. C. 3 Cowen, 662. See Edwards on Bills and Notes, 402, 460, 475; Ainsworth v. Backus, 5 Hun, 414, 416. 2 Durnford v. Patterson, 7 Martin, 460, 464. 3 McNabb v. Lockhart, 18 Ga. 495; Jenkins v. Mathews, 1 Sneed, Tenn. 248; Car- riugton V. Ficklin, 32 Gratt, 670; Dunn t. Brunner, 13 La. Ann. E. 452; Tompkins V. Saltmarsh, 14 Serg. & Bawls. 275; Tracy v. Wood, 3 Mason, 132. One who collects rents for another gratuitously is liable only for gross negligence in the care of the money collected. Bronnenburg v. Charman, 80 Ind. 475. * Jones on BaUm. 63; Spooner v. Mattoon, 40 Vt. 300. * Lane v. Cotton, 1 Ld. Eaym. 646; Kettle v. Bromsale, Willes' E. 121. 68 Law of Bailments. or of conduct which, though applied tc:> his own goods, would be deemed negligent in a bailee without hii-e, of ordinary prudence.^ Negligence is a fact to be found from the evidence. § 80. How far the mandatary may be rendered liable for the want of proper care, even where he shows the same neglect of his own goods, is very well shown in the action of Tracy v. Wood.^ A undertook gratui- tously to carry two parcels of doubloons for B, from Xew York to Bos- ton, in a steamboat, by the way of Providence. A in the evening (the boat being to sail early in the morning,) put both bags of doubloons, one being within the other, into his valise with money of his own, and carried it on board of the steamboat and put it into a berth in an open cabin, although notice was given to him by the steward that they would be safer in the bar-room of the boat. A went away in the evening, and returned late, and slept in another cabin, leaving his valise where he had put it. The next morning, just as the boat was leaving the wharf, he discovered, on opening his valise, that one bag was gone, and he gave an immediate alarm and ran from the cabin, leaving the valise open there with the remaining bag, his intention being to stop the boat. He was absent for a minute or two only, and, on his return, the other bag also was missing. An action being brought against him by the bailor for the loss of both bags, the question was left to the jury whether there was not gross negligence, although the bailee's own money was in the same valise. The jury were directed to consider whether the party used such diligence as a gratuitous bailee ought to use under such cir- cumstances, and they found a verdict for the plaintiff for the first bag lost, and for the bailee for the second. Here is another illustration of the same rule, that the bailee may be liable where he keeps the property as he does his own. The defendant, a coffee-house keeper, havmg the custody of money without reward, lost it, and gave this account of it : that he had put it, with a large smn'of money of his own, into his cash box, which was kept in his tap-room ; 1 Eootli V. Wilson, 1 B. and Aid. 59. That the bailee has dealt with his property and the bailor's iu the same way is a fact which always may be shown as an element in adjusting the standard of duty and deciding the question of its performance, as well as a test of the bailee' s good faith. On the proof of such a fact a presumption of ade- quale diligence would ordinarily arise. Bnt the question of the bailee's responsi- bility must be finally settled by a resort to the settled principle which deduces the measure of his duty in each particular bailment from a comparison of liis conduct with the conduct of classes of men and not of individuals. The bailee is not shielded from liability for neglect of ordinary care by showing tliat he lias been careless, inattentive and reckless in the management of his goods as well as those of the bailor. First Xat. Bank of Carlisle v. Graham, 19 Pa. St. 106. 2 3 Mason R. 132; Conway Bank v. Amer. Ex. Co., 8 Allen, 512. Geatuitous Commissions. 69 that the tap-room had a bar in it and was kept open on a Sunday, the rest of his house not being kept open on that day ; and that the cash box, with his own and the plaintiff's money, had been stolen on that day. The judge left it to the jury to say whether the defendant was guilty of gross neglect ; and told them that the loss of the defendant's own money did not necessarily prove reasonable care. The charge of the judge was afterwards held good, and it was decided, first, that the question of gross negligence was properly left to the jury ; and second, that there was evidence on which they might find for the plaintiff.^ § 81. The degree of care requii-ed of the mandatary is materially affected by the circumstances attending the execution of the contract, such as the kind and value of the goods baUed and their liability to in- jury. Lord Stowell puts this case in point : " If I send a servant with money to a banker and he carries it with proper care, he would not be answerable for the loss, though his pocket were picked by the way. But if, instead of carrying it in a proper manner and with ordinary caution, he should carry it openly in his hand, thereby exposing valuable property so as to invite the snatch of any person he might meet in the crowded population of a large town, he would be liable ; because he would be guilty of negligentia malitiosa, in doing that from which the law must infer that he intended the event which has actually taken place." ^ 1 Doorman v. Jenkins, 2 Adolph. and Ellis, 256. See Smitli v. First National Bank of Westfield, 99 Mass. 605; Lancaster Bank v. Smith, 62 Pa. St. 47; Maury v. Coyle, 34 Md. 2.35, 247; Erie Bank v. Smith, 3 Brews. 9. ^ Eendsberg, 6 Bob. Ad. 141, 155. So, also, the captain of a vessel who carries the ^oods of another, though not for hire, is bound to take prudent care of them; and where he intermeddles with the chest of a seaman, who has been casually left behind, he is bound to restore it to its former state of security, particularly if the contents be valuable. Thus in Nelson v. Macintosh, 1 Starkie N. P. 188, an action of case for so negligently carrying plaintiff's box, containing doubloons, dollars and other valuables, that the box and Its contents were lost ; plaintiff came on board the Arundel, of which the defendant was captain, at Trinidad, with the intent to work his passage home, but being casually on shore when the signal was given for sailing, was left behind. Plaint- iff's box was stowed with others on the quarter deck, and soon after departure, was opened by the defendant, upon a suggestion that it might contain contraband goods. The box was fastened with a lock, and the lid was also nailed down ; having ascertained the contents, the lid was replaced and nailed down again. Toward the termination of the voyage, the captain again opened the box in the presence of the passengers, and placed the contents in a canvas bag, which he deposited in his own chest in the cabin, where he usually kept his own valuables. On arrival at Gravesend, a river pilot was taken on board, and the captain and one mate left the vessel, another mate remaining onboard; an excise officer was also on board, and two yoimg men belonging to the vessel who slept in the cabin. On the next morning the captain's trunk containing the valuables was missing, and not afterwards found. The defendant introduced evi- 70 Law oy Bailmekts. § 82. A gratuitous bailee of money or small packag-es of great value must take the common care of them usually bestowed upon such arti- cles ; he must use a degree of diligence and attention adequate to the performance of the trust ; such ordinary care as the circumstances naturally call for.^ Being a gratuitous bailee, a volunteer in the service of another, he does not guarantee the safe transmission of the money, without an ex- press stipulation to that effect. His engagement is to use the necessary care and diligence in the discharge of his trust ; namely, such care in its transportation and delivery, as persons of common prudence in his situation usually bestow in the custody and keeping of similar prop- erty belonging to themselves.^ He makes the business his own, and engages to employ upon it the same care, attention, and diligence which he would use were the business actually his own : the contract implied by law can hardly be more comprehensive. § 83. "Where the owner of his own free will confides his property to the custody of another, he knows or may fairly be presumed to be ac- quainted with his character ; and in such a case it is not unreasonable to assume that the owner assents that the bailee shall keep or carry the dence tending to show tliat the property had been stolen by persons unooruiected with the vessel. But Lord EUenborougli, before whom the action was tried, charged the jury that in a case like this, though a person does not carry for hire, he is bound to take proper and prudent care of that which is committed to him, and he left it to the jury to consider — 1st. Whether the captain had not, under the circumstances, by the intermeddling and removal, imposed on himself the duty of carefully guarding against all perils to which the property was exposed in consequence of the alteration. 2(1. Whether he had in fact carefully guarded the property ; and that if they were of the opinion that the conduct of the defendant had imposed upon him the duty of carefully guarding the goods, and that he had been guilty of negligence, they were to find for the plaintiff ; and the jury rendered a verdict for the plaintiff. It is evident from the above , as well as other cases, that the rule of liability is relaxed or rendered strin- gent so as to meet the circumstances of each particular case. The principle, indeed, remains the same in all cases, but its application is left mainly to the jury, who find from the circumstances whether there has been a loss through negligence. The mere mandatary, it is to be observed, is liable only for gross negligence ; this is the general principle. Stanton v. Bell, 2 Hawks, 145; Lodowski v. ]UcFarland, 3 Dana, 205; Tracy V. Wood, 3 Mason, 132. Gross negligence is the omission of that care which bailees ■without hire, or other mandataries, of common prudence, are accustomed to take of . property of the like kind. Articles of great value, such as may be easily injiu'ed, de- mand a greater degree of care than those of less value. Money, jewelry, and pictures are of this description. Graves v. Ticknor, 6 N". H. 537. ^ Jenkins v. Mathew, 1 Sneed, 248 ; McNabb v. Lockhart, 18 Georgia, 495 ; Graves V. Ticknor, 6 N. H. 537. 2 Eddy V. Livingston, 35 Mo. 487; Colyar v. Taylor, 1 Cold. Tenn. 372; The Stato v. Meagher, 44 Mo. 363; .Jourdan v. Reed, 1 Clarke (Iowa). 135. Geattjitous Commissions. 71 same with the care which he usually takes of his own property.^ For the same reason, the owner's assent that the business shall be trans- acted according to an established usage may be presumed.^ But mere knowledge by the bailor of the mode in which the bailee receives and takes care of property intrusted to him, will not as a matter of law absolve him from liability for a want of due care : unless the circum- stances be such as to establish an agreement as to the nature and degree of care to be used by the bailee.'' § 84. A mandatary holds the property under a special trust, and is held to a strict fidelity in the execution of the trust ; he must perform his engagement with perfect fairness and strict integrity. Xo reason can be suggested why he should not be held to the same rules of ac- countability as an ordinary trustee of personal property : ■* and to the same rules which enforce the duties of an agent to his principal.^ Neither an agent nor a trustee is permitted to have or to acquire in ^he business committed to him, any interest adverse to that of the party for whom he acts.' The relation in which he stands precludes him from any surreptitious dealing on his own account, at the expense of the principal or party on whose behalf he is acting. Factors, agents, and brokers acting as such, and having the custody of money or property belonging to a principal, act m a fiduciary capac- ity ; and are for that reason held to a strict liability.' So an attorney collecting money for his client, or an agent receiving money to invest or to appropriate in a special manner, holds it in a like fiduciary capac- ity ; " and his duty to follow his instructions, or to account for the fimd, is not much affected by the circumstance that he is or is not to be paid for his services. The remedy given against him by arrest is placed upon the ground of a violated trust.' 1 The William, 6 Rob. Ad. R. 316. 2 Gibson v. Culver, 17 Wend. 305; Van Santvoord v. St. John, 6 Hill, 15Y. ' Conway Bank v. Amer. Ex. Co., 8 Allen, 512; ante, § 50. See Eastman v. Patter- son, .38 Vt. 146. \* Taylor v. Fire Department of N". T. 1 Edw. Ch. 294, 299; Chapin v. Weed, Clarke's Ch. R. 464. s Reed v. Warner, 5 Paige's Ch. R. 650, 656. " Conkey v. Bond, 36 IST. T. 427; Morrison v. O. & L. C. R. R. Co., 52 Barb. 173. ' Duguid V. Edwards, 50 Barb. 288. 8 Gross V. Graves, 2 Robt. 707; White v. Piatt, 5 Denio, 269. 9 Schieder v. Shiells, 17 How. Pr. 420. See Dodge v. Tileston, 12 Pick. 328. The engagement of the mandatary partakes of the nature of a trust, in the execution of which a strict fidelity is required of him; as much as this is implied in a remark quoted from one of Cicero's speeches, that the ancient Romans considered a mandatary as infamous if he broke his engagement, not only by actual fraud, but even by more than ordinary negligence. Jones on Bailm. 63. The confidence reposed in him was 72 Law of Bailments. § 85. A loan of animals to be used for their keep, creates a Iniilment for hire ; and subjects the bailee to the rules applicable to that class of bailees.! So the delivery of a chattel on trial, pending a negotiation for a sale, to be kept at a price named or returned, creates a bailmeat mutually beneficial to the parties ; the bailee is not liable for a loss or injury to property, where he has taken due^or reasonable care of it.^ So the delivery of goods to a party for use under a contract that they shall become his on his paying a certain sum, is to be treated as a bail- ment rather than a conditional sale ; ^ but there is certainly an element in the contract not found in a simple bailment ; so that an action by the bailee against a trespasser for taking the property before the day fixed for payment, will not bar a second action by the vendor to recover its value.* There is a clear distinction between the case of a delivery of a chat- tel on a condition that the party receiving it shall try it and keep it at a price named or return it within a given time in case he does not like it, and a present sale of a chattel giving the buyer the privilege of evidently regarded as creating an obligation wliicli could not be violated without dis- honor, without incurring the infamy attaching to the betrayal of a trust. But this is rather a statement of the obligation, as it is felt by an honorable and faithful man, than a strictly accurate definition of the legal duty; for the law does not, as we have seen, hold the mandatary, without reward, to so strict a rule of responsibility as it im- poses upon the bailee for hire. It prefers rather to base the obligation of the contract upon a consideration of benefit, or of actual trust, coupled with the custody of property; but in some instances, a moral obligation arising out of a pre-existing and valuable consideration is regarded as sufficient to support an express promise or undertaking, such as a debt barred by the statute of limitations. Cook v. Bradley, 7 Conn. K. .57. Where a legal obligation has once existed, it may be made the basis of a future under- taking valid in law. A mere moral obligation, which does not arise out of a, pre- existing legal duty, will not support a promise. 1 Chamberlain v. Cobb, 32 Iowa, 161; Maxwell v. Henston, 67 N. C. 305. 2 Hunt V. Wyman, 100 Mass. 198; De Fonclear v. Shottenkirk, 3 John. R. 170; Nichols V. Eoland, 11 Martin, 192; Colton v. Wise, 7 111. App. 395; Foreman v. Drake, 98 K. C. 311 ; A. D. Puffer & Sons Manuf. Co. v. Baker, 104 N". C. 148. 'Becker v. Smith, 59 Pa. St. 469. In Pennsylvania a sale and delivery with an agreement that the title shall remain in the vendor until the price is paid, is regarded as fraudulent, and is held void as against the creditors of the vendee. Heppe v. Speakman, 7 Phila. K. 117; Martin v. Mathias, 14 S. & E. 214. It is not regarded as fraudulent where the property is and is to be employed in the service of the vendor until paid for. Lehigh Co. v. Field, 8 W. & S. 2:a; Sterling & Son v. Goodrich, 6 Pittsburgh Legal .Journal, X. S. 174. A like decision was made in Wait v. Green, 36 N. T. 556, and overruled or qualified in Ballard \. Burgett, 40 ><". Y. 314. See Austin V. Dye, 46 K. T. 500; Comer v. Cunningham, 77 N. Y. 391; Brewer v. Ford, 54 Hun, 116; S. C. 59 Him, 17; Frank v. Batten, 49 Hun, 91; Sargeant v. Metcalf, 5 Gray, 506; Hart v. Carpenter, 24 Conn. 427; Bigelow v. Huntley, 8 Vt. 151. * Hasbrouck v. Lounsbury, 26 N. T. 598. Geatuitous Commissions. 73 Teturning it after a trial. There is a condition in each of these con- tracts : in the first, a condition on which the sale is to take place ; and in the second, a condition on which the sale may be rescinded.' The right to rescind depends upon the terms of the contract ; it is to be exercised in the time and manner agreed upon by the parties.^ § 86. The action of assumpsit lies for the recovery of money appro- priated or misapplied by the defendant.^ It lies on a .valid promise made by the defendant to a third person, for the benefit of the plaintiff.* Under the present practice an action for money had and received to the plaintiff's use may be maintained the same as under the old practice ; without a demand, where it is received under an engagement to remit or pay it over without delay ; '' and on a demand, where it is received as a deposit or under circumstances that justify the agent or bailee in wait- ing for instructions.* Where a person accepts money from one man to deliver over to another, an action of assumpsit lies for not paying it over.' And where an agent undertakes to effect an insurance, and fails to do so, it is his duty to give notice to his principal, for a breach of which duty the action of assumpsit will lie.' A gratuitous undertaking, not accompanied by a bailment of any kind, as to obtain a policy of insurance, or to make an entry of goods for a friend at the custom-house, entered upon, binds him to act in good faith and with reasonable care ; it does not render him responsible for the use of anything more than ordinary skill, or that degree of knowledge and skUl usually possessed by men in his situation or business.^ § 87. The Contract. An ingenious writer in the American Jurist main- tains that there is, in fact, no contract formed between the mandator and 1 Hasbrouck v. Lounsbury, supra, and Hunt t. Wyman, supra; Bailey v. Colly, ."4 N. H. 29; Vincent v. Cornell, 13 Pick. 294. 2 Giles T. Bradley, 2 John. Cas. 253; Lord v. Kenny, 13 John. R. 219; Pinney v. Hall, 1 Hill, 89. See also, Burrell v. Root, 40 N. T. 496. 8 Dumond v. Carpenter, 3 John. R. 183; Weston v. Barker, 12 John. R. 276. * Del. & Hudson C. Co. v. Westchester Co. Bank, 4 Denio, 97; Dingeldiein v. Third Ave. E. E. Co., 37 IST. T. 575; Kelly v. Roberts, 40 IST. T. 432, 438; Lawrence v. Fox, 20 N^. T. 268; Secor v. Lord, 3 Keyes, 525; Coster v. Mayor, 43 N. T. 399. = Stacy V. Graham, 14 N. Y. 492; Schwinger v. Hickok, 53 N". T. 280, 286; Howard V. France, 43 N". Y. 593; Mills v. Mills, 115 N. Y. 80; Matter of Cole, 34 Hun, 320; Compton V. Elliot, 16 Jones & Spencer, 211. « Phelps V. Bostwick, 22 Barb. 314. ' Wheatley v. Low, Cro. Jac. 667. ' Callender v. Oelrichs, 1 Arnold E. 401. 'Shiells V. Blackburne, 1 H. Black. 158; Mone v. Morgue, Cowper, 480; Percy v. Millandon, 8 Martin N. S. 68, ">. See Dartnall v. Howard, 4 Barn, and Cress. 345; Heinemann v. Heard, 50 N. Y. 27, oJ. 74 Law of I^ailmekth. the mandatary ; and that though the mandatary is hable for misfeasance in the execution of his trust, he is so, not by virtue of his contract, but for his tort} Tliis theory is maintamed in an elaborate article, the argu- ment in which proceeds mainly upon the form of action, usually case, which is brought for the violation of the trust ; the question of liabiUty being always tried and decided on the plea of not guilty:^ " The form of the action is, not assumpsit, but case ; the plea is not non-assumpsit, but not guilty. In this view of the matter there is no inconsistency, no principle is violated, everything is congruous. The bailor's want of right to sue for non-feasance is entirely consistent with his right to sue for misfeasance. Assumpsit cannot be for misfeasance as such. If you sue for misfeasance, your action is grounded on tort, not on contract. It arises t.c delicto, not ex contractu. If there be a binding contract to do, and misfeasance in the execution of it, you may, generally speaking, bring assumpsit ; but then the gist of your action is the non-perform- ance of the contract ; and you must take care to declare on the non-per- formance, and use the misfeasance as evidence of it ; for if there be mis- feasance, the contract is not performed as it was agreed to be, and of course assumpsit lies for the breach." This distinction is very nicely drawn, but the difference between callmg the undertaking of the mandatary a contract or a trust is not very broad. In either case, the obligation arises out of the relation of the respective parties to each other, and the tort or wrong consists in the failure to perform the act undertaken, with the degree of care whicli that obligation imposes upon him. Commentators and judges have uni- formly spoken of this undertaking as a contract, treating and enforcing it as such, as often as it has been brought before a judicial tribunal, or discussed as an elementary question. It is none the less a contract because, in most cases, it is implied by law ; whether a recovery may be had for its violation depends upon the plaintiif's showing that the de- fendant has failed to discharge the obligations it cast upon him, that is, has failed to do the act with proper care. Though the form of the action be case, it is usual and necessary to incorporate into the com- plaint the substance of the contract, and the plea of not guilty puts in issue simply the allegations of damage or loss by the negligence alleged.' Other matters must be pleaded specially, as in actions of assumpsit. In the action of case, against a common carrier, the plea of not guilty operates only as a denial of the loss or damage through the default or 1 Vol. 16, page 275. 2 Idem, 262. 2 Appendix to Warren's Law Studies, 2d ed. p. 37. See also, form of declaration, Tates' Pleadings, 371; and So. Ex. Co. v. McVeigh, 20 Gratt. Va. 264. Gkatxjitous Commissions. 7& negligence charged, but it does not put in issue the fact of the receipt of the goods by the defendant as a carrier for hire, nor the purpose for which tliey were received. Assumpsit and case are in many instances concurrent remedies, under a practice so long established that it has interwoven itself with the first principles of the common law. Mr. Justice Littledale thus states the distinction between these two forms of action, from which we shall perceive how far the tort diiiers from a breach of contract i^" Where there is an express promise, and a legal obligation results from it, there the plaintiff's cause of action is most accurately described in assumpsit, in which the promise is stated as the gist of the action. But where, from a given state of facts, the law raises a legal obligation to do a par- ticular act, and there is a breach of that obligation and a consequential damage, there, although assumpsit may be maintainable upon a promise implied by law to do the act, still an action on the case, founded in tort, is the more proper form of action, in which the plaintiff, in his declaration, states the facts out of which the legal obligation arises, the obligation itself, the breach of it, and the damage resulting from that breach. For that is the most accurate description of the real cause of action ; and that form of action, in which the real cause of action is most accurately described, is the best adapted to every case." § 88. The consideration for the contract or undertaking of the bailee or the mandatary, in the action of case, is always stated to be the de- livery of the goods at the instance of the defendant for the purpose con- templated by the parties ; following which, comes the allegation that it became the duty of the defendant to take due ci^re of the property so intrusted to him, and redeliver or carry the same according to the understanding under which it was received ; then follows the allegation of a breach of duty, namely, an averment that the defendant, not regard- ing his duty in that behalf, did not take proper care of the thing bailed, whereby ensued damage or loss to the plaintiff. On a plea of not guilty, to such a declaration, though it put in issue only the question of neg- ligence, it is evident that the cause of action arises in part out of the contract set forth by way of inducement. If we call it an implied con- tract, as it is in most cases, and the breach of the duty imposed by law a tort, the tort itself grows out of a failure to perform the duty or en- gagement implied by law from the relation into which the parties have entered towards each other. So that the emphasis which the writer in the American Jurist places on the fact, that the remedy here is by an action of tort, can hardly be held to negative the existence of a contract.* 1 Burnett v. Lynch, 5 B. and C. 609. " 16 American Jurist, 264 to 275. 76 Law of Bailments. Indeed, though there be an express contract on which an action of as- sumpsit would lie, still, if a common law duty results from the facts, the party may be sued in tort for any neglect or misfeasance in the execution of the contract ; ^ the action, however, is then grounded on the misfeasance, and the contract is stated as matter of inducement. § 89. It is plain that the form of pleading, while it may sometimes illustrate the principles of law on which the rights of parties may depend, does not determine this question. The cases all hold that there is a contract, and that the owner's trusting the mandatary with the goods is a sufficient consideration to oblige him to a careful management.^ An executory contract, to assume the duties of a mandatary to be performed at some future day, is not binding ; but the breach of a trust under- taken voluntarily is a good ground for an action.* The actual entry upon the thing and taking the trust upon himself is held a considera- tion. j\Ir. Justice Stoey puts this case by way of illustrating the prin- ciple involved : " If A should intrust a letter to B, containing money, to pay his note at a bank in Boston, due on a particular day, and B should gratuitously undertake to deliver the letter, and take up the note on that day, and he should neglect to carry the letter, or to take up the note, whereby the note should be protested, and .V should suffer a special damage, B would, at the common law, be liable to an action for his neg- ligence, and the delivery of the letter to B, under such circumstances, would be a part execution, and a sufficient consideration to support the action." ^ The same would be the case, no doubt, where the mandatary gratuitously engages to carry other property from one place to another ; the engagement coupled with an actual receipt of the thing bailed creates the contract and binds him to its fulfillment.^ The contract does not become perfect till some act is done by way of its execution. § 90. There are many cases in which goods come into a party's pos- session in the course of his business, or are left in his custody by acci- dent or oversight, without any express contract for their safe-keeping, and where no compensation is expected or paid for their storage. E. g., a common carrier, receiving and transporting a passenger and his bag- gage, ceases to be liable for the baggage as a carrier after the lapse of a reasonable time after its arrival at the place of destination ; from that time he holds the baggage under a modified liability, analogous to that iBurnkt V. Lynch, 5 B. and C. 009; Boorman v. Brown, P, Q. B. 511; Tillinglmst's Forms, 418. ^Coggs V. Bernard, Ld. Raym. 909; .3 Salk. 11. " Roll. Abr. 10; 2 Hen. T, 11; Elsee v. Gatward, 5 T. R. 14:1. * Story on Bailm., § 171; ShlUabeer v. fjlyn, 2 Mees. and Welsh. 14."i. * Coggs V. Bernard, Ld. Raym. 909. Geattjitotjs Commissions. 77 of a warehouseman. His duty to exercise care over the property thus remaining in his hands grows out of the original contract ; he assumes the duty of keeping the property till called for ; he does not hold it as a mere gratuitous bailee ; he is therefore bound to exercise ordinary care in keeping and preserving the property.^ His liability is modified to that of an ordinary bailee, not liable for a loss by fire ; ^ the original contract, though modified in respect to the degree of liability assumed from a reasonable time after the arrival of the goods, being understood to contemplate a possible delay, and to cover the delivery." The same principle applies where goods are inadvertently left in a street car, and the carrier takes charge of them. Though there be no intent to deliver the property into the custody of the carrier, his custom of taking charge of it, when so left by the oversight of a passenger, en- hances the security of this mode of travel ; and the regulations to that effect may reasonably be considered as incidental to the business. The traveling public naturally assume the existence of a custom so reason- able as this. ' And though the carrier never becomes liable as such for the parcel, he is treated after taking charge of it as a bailee for hire, bound to keep it with ordinary care.* The engagement of an express carrier, who receives a note to be carried into another State where the maker resides, and there presented for payment and collected in case payment is refused, is enforced as one entire contract. In substance it is a double contract ; a contract to carry and present for payment ; and a contract to prosecute and collect the demand. The carrier's undertaking is as broad as the instructions under which he receives the note ; he is bound and liable to the same extent as a bank receiving a note for collection, and he is answerable for the conduct of his agents employed in any part of the business.^ § 91. A bank or an agent, receiving a note or a draft for collection, undertakes to perform the acts necessary to charge the drawer and in- 1 Bumell V. N. T. C. E. R. Co., 45 N. T. 184; Gary v. Cleveland & Toledo R. R. Co., 29 Barb. 35; Norway Plain Co. v. B. & M. E. E., 1 Gray, 271; Mattison v. KewTork Cent. R. E. Co., 57 N. T. 552. 2 Eotli V. Buffalo & State Line E. R. Co., 34 N. T. 548. This case is sufficiently favorable to the carrier. 3 McAndrew V. Whitlock, 52 N". T. 40. * Morris v. Third Ave. E. Co., 1 Daly, 202; 23 How. Pr. 345; 2 Daly, 103; Town v. N. & S. E. R. Co., 7 Hill, 47. The same rule applies where a ticket agent without re- ward receives and stores parcels belonging to passengers. Green v. Birchard, 27 Ind. 483. ^ Palmer v. Holland, 51 N. Y. 416; Ayrault v. The Pacific Bank, 47 IST. T. 570. In some of the States a collecting agent is not held liable for the conduct of a foreign agent netessarily employed in the business. 78 Law of Bailments. dorsers ; and his contract makes the agent answerable for the default of the parties employed by him in the business.^ And though no specific sum be paid for the service, the engagement is treated as a contract ; a contract implied from the deposit of the bill or note by a customer with his bank for collection.^ The business is incidental to that of the bank ; and the service is not really gratuitous because the deposits of a bank, being found to average a fixed sum, are made the basis of dis- counts ; so that indirectly the bank is compensated for the service.^ The rule of liability is now so long settled, that its basis in a consideration of value is not often adverted to in recent cases. Indeed, the bailment of negotiable paper for collection creates a contract of mandate, which must be enforced where no pecuniary benefit can arise from it to the bailee.* A party who undertakes the business of another, and being capable of managing it, neglects to do so with due care, is responsible ; and if he be not capable, he is still answerable because he ought not to have engaged in a business beyond his capacity. In several of the States, a bank receiving a draft or note for collec- tion at a distant place, is bound to send it there to some suitable sub- agent or bank to be collected, and is not answerable for the default of the agent thus necessarily employed in the business.^ The second or sub-agent is then held directly liable to the owner for any damages or loss through his neglect." § 92. The managers or directors of a corporation are chosen by its members to take a general charge of its affairs and conduct its business. 1 Edwards on Bills & Xotos, 402, 40.5, 400, 47.5, 47C>; Reeves v. State Bank of Ohio, 8 Ohio St. 465; Allen v. Mercliants' Bank, 22 Wend. 215; Jlontgomery County Bank T. Albany City Bank, 7 N. Y. 450; Commercial Bank v. Union Bank, 11 N". Y. 203; Ayrault v. Pacific Bank, 47 N. Y. 570; Naser v. First Nat. Bank, 116 N. Y. 498; Titus T. Mechanics' Nat. Bank, 05 N. J. L. 588; Saint Nicholas Bank v. State Nat. Bank, 128 N. Y. 26; Wingate v. Mechanics' Bank, 10 Pa. St. 104; Tyson v. State Bank, 6 Blackf. 225; Simpson v. Waldry, 30 N. W. Eep'r (Mich.), 199; Mackersy v. Eamsays, 9 CI. & Fin. 818. 2 Allen V. Merchants' Bank of N. Y., 22 Wend. 215; Salt Springs National BankT. Wheeler, 48 N. Y. 492. ^Smedes v. Bank of Utica, 3 Cowen, 662; 20 John. R. 372; Foster v. Fuller, 6 Mass. 5S. * Durnford v. Patterson, 7 Martin, R. 460. 5 Dorchester & Milton Bank v. New England Bank, 1 Cush. (Mass.), 177; Etna Ins. Co. V. Allen Bank, 25 111. 243; Wingatp a. Mechanics' Bank, 10 Pa. St. 104; East HaddamBank v. Scovill, 12 Conn. 303; Third Nat. Bank v. Vicksburg Bank, 61 Miss. 112; Guelich v. Nat. State Bani, 56 Iowa, 404; Daly v. Butchers & Drovers' Bank, 56 Mo. 94; Bank of Louisville v. First Nat. Bank, 8 Bast. (Tenn.), 101. 6 Bank of Washington v. Tiplett, 1 Peters, 25 : Fabers v. Mercantile Bank, 23 Pick. 330; Lawrence V. Stonington Bank, Conn. 521. Gratuitous Commissions. 79 It is not contemplated that they should devote their whole time and attention to the institution, and guard it from injury by constant super- intendence. Other officers, on whom compensation is bestowed for the employment of their time in its affairs, have the immediate management. In relation to these officers, the duties of directors are those of control ; and the neglect which would render them responsible for not exercising that control properly must depend on circumstances, and be tested in a great measure by the facts of the case. Where nothing has come to their knowledge to awaken suspicion as to the fidelity of an offtcer, ordinary attention to the affairs of the institution is sufficient ; but where they become acquainted with any fact calculated to put prudent men on their guard, a degree of care is requii-ed commensurate with the evil to be avoided, and a want of that care makes them responsible.^ The powers conferred upon the directors and the nature of the busi- ness have an important bearing upon the duties prescribed to them by law. E. g., the directors of a bank alone have the power to make loans and discounts, and hence it is a negligent omission of duty on their part to permit the business of discounting notes and bills with the funds of the bank to pass into the hands of its officers.'^ They act for the cor- poration as a body, and each director has a right to examine its books ; he has a right to know what has been done at a meeting of the board when he was not present.' As a fair inference from this right, a direc- tor ought to know the course of its business and the situation of its affairs.* By accepting the trust, he is charged with the duty of taking all reasonable care in the management of the concerns of the bank. !■ Percy v. Millandon, 8 Martin, IST. S. 68, 73; Scott v. Depeyster, 1 Edw. Ch. 541. •See Briggs v. Spaulding, 141 U. S. 132; Louisville Savings Bank v. Caperton, 87 Ky. 306; Cutting v. Malilor, 78 N. Y. 460; Onderkirk v. Central Xat. Bank, 119 N. T. 263, 272. 2 Bank of Comrs. v. Bank of Buffalo, 6 Paige Ch. E. 497, 502; Bank of U. S. v. Dunn, 6 Peters 51. ^Tlie People v. Tliroop, 12 Wend. 183; People v. Pacific Mail S. Co., 50 Barb. 280. * It is undoubtedly the duty of bank directors to use ordinary diligence in acquiring knowledge of the business of the bank. United Society of Shakers v. Underwood, 9 Bush (Ky.), 609. Where one voluntarily takes the position of trustee or director of a corporation, good faith, exact justice, and public policy require of him such a degree of care and prudence that men prompted by self-interest generally exercise in their own affairs. Hun v. Cary, 82 N". T. 65, 71. Directors cannot, in justice to those who deal with the bank, shut their eyes to what is going on around them. It is their duty to use ordinary diligence in ascertaining the condition of its business and to exercise a reasonable control and supervision of its officers. That which they ought by proper diligence to have known as to the general course of business in the bank, they may be presumed to have known in any contract between the corporation and those who are justified by the circumstances in dealing with its ofiicers upon the basis of that 80 Law of Bajl.ments. § 93. The directors of a corporation entrusted with its funds, and with the management of its business, are certainly liable for losses which happen through gross negligence and mattention to the duties of their trust.i They ai-e not answerable for honest mistakes or for errors of judgment.^ They do not become sureties for the agents they employ : they receive from the corporation no direct compensation for their serv- ices; as stockholders they receive dividends from its earnings with the others, and are hence held liable for ordinary neglect, or for the omission of that care which men of common prudence take of their own concerns.' The relation between them and their co-stockholders is analogous to that of partners ; * they also stand in nearly the same situation as gen- eral agents intrusted with the conduct of an important business.'" § 94. The action of the directors, or of the legal quorum required for the transaction of business, is the act of the corporate body itself; the corporation is responsible for their acts, though done in violation of law.' In a general sense, the board of directors act for the benefit of the share- holders ; in a legal sense, they do not exercise a delegated authority; in their dealings with others they constitute the corporation.' And. course of business. Martin v. Webb, 110 U. S. 7, 15. The board of directors is pre- sumed to have the linowledge possessed by a prior board. ^Mechanics' Bank v. Seton, 1 Peters, 299, 309. It has been held, in an action by a depositor against the directors of an insolvent bank for the conversion by its officers of a special deposit, that the de- fendants were chargeable with knowledge of such facts as appear upon the books and papers of the bank. United Society of Shakers v. Underwood, 9 Bush, 609. But in the courts of this State and of the United States it is settled by recent decisions that knowledge of all the affairs of a bank, or of what its books and papers would show, cannot be imputed to a director for the purpose of charging him with liability; and that there is no rule of law which charges a director or stockholder of a corporation with actual knowledge of its business transactions merely because he is such director and stockholder. Eudd v. Robinson, 120 :N". Y. 113; Briggs v. Spaulding, 141 U. S. 1.32; and see Wakrman v. Dalley, 51 N. Y. 27. 1 Eobinson v. Smith, 3 Paige, 222 ; Brinckerhoff v. Bostwick, 88 N. Y. 52 ; Hun v. Cary, S2 X. Y. 05. 2 Harman v. Tappenden, 1 East, 555 ; Witters v. Sowles, 31 Fed. Rep. 1 ; Wallace v. Lincoln Savings Bank, 89 Tenn. 630; VanDyck v. McQuade, 80 X. Y. 38 ; AViUiamsT- McDonald, 37 N. J. Eq. 409 ; Spering' s Appeal, 71 Pa. St. 11. But as a director is bound to exercise ordinary skill and judgment, he cannot, when loss has been occasioned by his failure to exercise them, excuse himself by claiming that he did not possess them. Hun V. Cary, 82 X. Y. 65. 3 Scott V. Depeyster, 1 Edw. C'h. 513, 527, 543; Briggs v. Spaulding, 141 U. S. 132; Clews V. Bardon, 36 Fed. Rep. 617; Dunn v. Kyle, 14 Bush (Ky.), 1.34. See Preston t. Prather, 137 U. S. 604. " Bailey v. Bancker, 3 Hill, 188. See Bissell v. N. S, & X. I R. Cos. 22 X. Y. 258. ^ Andrews v. Murray, 33 Barb. 354; Richardson v. Abendroth, 43 Barb. 162. •'■ Bank Comrs. v. Bank of Buffalo, 6 Paige, 497. ' Burrill v. Nahant Bank, 2 Melc. (Mass.), 163. Gratuitous Commissions. 81 where they allow the business of the corporation, a bank, to be trans- acted by an ofBcer or financial manager for a length of time, his dealings with third persons will bind the corporate body.^ The officers of a cor- poration act as agents, and are Uable as such.^ Actmg with authority, their acts and contracts will bind the corporation.' § 95. The directors or managers of a corporation are trustees, answer- able to its members or shareholders for any breach of trust, or any mis- appropriation of the corporate funds, or for any want of good faith in their dealings with its property.' An action may be maintained by a stockholder, in his own behalf, and in behalf of the other stockholders, against the directors acting in bad faith. In equity a director may be treated as the agent or trustee of the stockholders, and held liable on the ground that he acts in a fiduciary capacity.^ Officers entrusted with the transfer of the stock on the books of a corporation are liable to any subsequent purchaser of unauthorized or spurious stock, fraudulently issued by them. The right of action arises upon the purchase.* The corjporation is also liable to the purchasers of such fraudulent and spurious stock, where it has through its own negli- gence and misplaced confidence furnished the opportunity and permitted the over-issue ; it is liable for the fraud perpetrated by its agent within the letter of his authority in respect to matters which lie peculiarly within his knowledge.' § 96. Remedies. Every misuse or misappropriation of goods intrusted to the mandatary will render him liable, being a Ijreach of the contract under which he receives them.* A misuser of the goods in contraven- 1 Smith V. Lansing, 22 N. T. 520. 2 Austin V. Daniels, 4 Denio, 299. 8 Olcott V. Tioga, R. Co. 27 N. T. 546. 4 Butts V. "Wood, 38 Barb. 181; S. C. 37 N. T. 317; Barnes v. Brown, 80 K. T. 527. 5 Cumberland Coal Co. v. Sherman, 30 Barb. 553 ; Michoud v. Girod, 4 How. U. S. 554; Case v. Carroll, 35 N. T. 385; Brinckerhoff v. Bostwick, 88 N. T. 52, 59. But an action against an officer of a corporation to recover damages for a fraudulent mis- appropriation and conversion by him of the corporate property can only be brought by the stockholder in his own name after application to and refusal by the corporation to bring the suit. Greaves v. Gouge, 69 N. T. 154. 8 Shotwell V. Mali, 38 Barb. 445; S. C. 36 N. Y. 200. ' N. T. & K H. E. R. Co. V. Schuyler, 34 ]S^. T. 30; Titus v. Brest. etc.G. W. Turnpike Road, 61 N. Y. 237. The niunber of shares of the stock being fixed by law, and out- standing in the hands of the shareholders, no one but the transfer agent would be likely to know that a given number of shares represented the genuine stock. A pur- chaser therefore has a right to act upon his assertion as to that matter of fact, since it rests peculiarly within the knowledge of the agent. « Be Tollennere v. Fuller, 1 So. Car. Const. E. 121 ; Ulmer v. Ulmer, 2 Xott and llcCord, 489. 6 82 I^AW OF Bailmbkts. tion of the trust will amount to a conversion of them, and this of course renders the mandatary liable for their value, since by such act he appropriates them as his own.^ After such an unauthorized assertion of title, or the right of control over the property, the mandatary will be charged with every risk attending it.^ This follows logically from the fact that any conduct or act which amounts to a conversion renders the mandatary responsible for the property, so that the owner may recover the same, or its value, m an action as he may elect. § 97. The owner's remedy, where a mandatary receives money to de- liver to another and fails to make the delivery, must depend upon the contract, or upon the relation in which the parties stand to each other- If the money be sent by an agent to the owner according to his instruc- tions, the owner alone may sue for and recover it ; the agent retains no interest in the money.'' If the money be placed in the hands of the mandatary by a debtor, to be delivered to his creditor, an action may he brought by either the debtor or the creditor to recover the money ; by the debtor because it is his money and he is interested in having it paid over ; and by the creditor because the bailee has promised to pay it to him. In both of these cases it is proper to sue on the contract ; as it is in all cases where, by the understanding of the parties, the baUee is at liberty to deliver the same amount in other bills.* When the money is delivered to a mandatary in a sealed package, an action of assumpsit for money had and received cannot be maintained without showing that he has broken the seal and appropriated the money to his own use. It is a breach of trust in him to break the seal, and the law will not infer such an act from his mere omission to deliver the package within a reasonable time.^ § 98. Failing to deliver a package of money within a reasonable time, it is the duty of the mandatary to render some account of it ; and if on demand he refuses to deliver or to give any account of the package, an action may be safely brought against him for its loss through his neglect.* 1 Holbrook v. Wright, 24 Wend. 169; BrOTro v. Hotchkiss, 9 John. E. 361. 2 Sargent v. Giles, .s New Hamp. Eep. :j25. 8 Thompson v. Fargo, 49 N. Y. 188. The contract, though made by the agent, enures to the benefit of the owner ; and where the agent has fulfilled his whole duty, and delivered the money as he was directed to, he has no interest in it. The owner must bring the action, or at least a party interested in the fund. Krulder v. Ellison, 47 N. T. 36; Green v. Clarke, 12 N. Y. 343. * Del. & H. Canal Co. v. Westchester Co. Bank, 4 Denio, 97. An infant cannot be charged in an action of tort in such a case. Root v. Stevenson, 24 Ind. llo. ^ Beardslee v. Richardson, 11 Wend. 25. " Beardslee V. Richardson, 11 Wend. 25; Boies v. Hartford, etc., E. R. Co., 37 Conn. 272; Dunn v. Branner, 13 La. Ann. R. 452; Newstadt v. Adams, 5 Duer, 43; Schwerin Gkatuitotjs Commissions. 83 Fnder the Code practice, a complaint alleging the facts would be suffi- cient to establish a cause of action, without giving it a name. It ■would prima facie establish a right to recover in an action in the nature of trover; because a failure to deliver to the owner on de- mand is evidence of a conversion ; and it is a conversion where the bailee has the package or goods in his custody at the time the demand is made.'' § 99. A delivery of a money package to a boy or to another man to complete the execution of the trust is unauthorized ; it is an act of gross negUgence.^ A misdelivery of the package, that is, a delivery of it intentionally or by mistake through inattention to a wrong party, renders the mandatory liable to the true owner. His good faith will not protect him ; he is bound to deliver the property to its owner.^ It will not excuse him to show that he made the delivery under a forged order ; * unless he is to be treated with some favor not shown to other bailees. Without regard to the motive, the sale of another man's prop- erty without his consent is a conversion of it, and in actions of trover a misdelivery by a bailee has the same effect.^ Clearly it casts upon him the burden of showing a loss of the property without any default or want of ordinary care on his part." § 100. A trust is often created, and a contract relating to goods is often made, for the benefit of a third person ; and that person is permitted to enforce the contract or trust by an appropriate action. His want of knowledge of the trust from the first will not affect his rights ; he may affirm it afterwards, and by affirming the trust he acquires the legal right to insist upon its execution ; it being beneficial to him, his assent to the trust will be presumed until the contrary appears.' The action of assumpsit is a proper remedy, where a contract can be implied from the facts and circumstances ; as it may be where money or goods are sent or dehvered by A to B, to be by him paid or delivered over to C, there being a valid consideration between A and C, the party bene- V. McKle, 5 Kobt. 404. The burden of proof is on the bailee, where the goods are not returned or are returned in a damaged condition. Cumins v. Wood, 44 111. 416. 1 Lockwood V. Bull, 1 Cowen, 322. 2 Skelley v. Kahn, 17 III. 170; Colyar v. Taylor, 1 Coldw. (Tenn.) 372. 3 Willard v. Bridge, 4 Barb. 361; Koykendall v. Eaton, 55 Barb. 188. * Hawkins v. Hoffman, 6 Hill, 586. See Price v. Oswego & Syracuse K. K. Co., 50 N. T. 213; McEntee v. New Jersey Steamboat Co., 45 K. T. 34. ^ Hicks V. Cleveland, 48 N". Y. 84. * Lancaster Co. National Bank v. Smith, 62 Pa. St. 47; Maury & Osborn v. Coyle, 34 Md. 235, 247. 'Cumberland v. Codrington, 3 John. Ch. R. 229, 2U1; Shepherd v. McEvers, 4 John. Ch. E. 136; Weston v. Barker, 12 Johns. 276. 84 Law op Bailments. ficially interested.! The plaintiff need not have been privy to the con- sideration.^ § 101. The Code has abolished the old forms of action, but has not abolished the previously recognized causes of action.^ Hence in many cases the bailor has an election, now as formerly, to sue on the bailee's implied contract, or to waive the contract and resort to an action in the nature of replevin, case or trover. The choice of the action to be brought is naturally determined by the remedy given by way of arrest ui actions of tort.^ If the bailee has been guilty of a conversion, an action of trover may be brought against him ; as where he has given a mortgage or made an absolute sale of the property, in violation of tlie trust. ^ The owner should make his election of remedies with care con- sidering the situation of the parties ; ^ and should not attempt to com- bine inconsistent causes of action ; since by so doing he may lose an advantage otherwise within his reach.^ He should also take care not to bring an action of replevin to recover the possession of securities or scriii, so situated that a delivery cannot be adjudged to the plaintiff, the title being in the defendant under a trust ; since his true remedy is by a suit in ec^uity.' § 102. The bailor cannot sue in trover, or in an action in the nature- of trover, unless there has been a wrongful conversion of the property ; and when he sues in that action, it is not to recover damages for the non-performance of any contract, but to obtain redress for the tort. The contract of bailment may be given in evidence for the purpose of proving the plaintiff's title, and showing that the property was in pos- ^Berly v. Taylor, '> Hill, 577; Sturtevant v. Orser, 24 N. Y. 538; Barker v. Bradley,, 42 N. Y. 316; Barker v. Bucklin, 2 Denio, 4.5. 2 Lawrence v. Fox, 20 X. Y. 2CS. 3 Denio, J., in Hull v. Carnly, 11 N. Y. 501, 510. ■* Brown v. Treat, 1 Hill, 225; Duguid v. Edwards, 50 Barb. 28.^; ilcGovem v. Payn, 32 Barb. S.3, 91 ; Bowen v. True, 5.3 N. Y. 640. 5 Sargent v. Gile, 8 X. II. 325; Stanley v. Haas, 40 Cala. 474; Ogden v. Lathrop, 1 Sweeny, 04.3. « As an illustration, see Morris v. Rexford, IS N. Y. 552; and Rodermund v. Clark, 46 N. Y. 354. The law does not permit a party to pursue conflicting and inconsistent remedies. Sanger v. Wood, 3 John. Ch. 410 ; Bowen v. Mandeville, 05 K. Y. 237 ; Butler v. Wehle, 4 Ilun, 54; Mills v. Parkhurst, 120 X. Y. 89; Bach v. Tuch, 126 K Y. 53; Grossman v. Universal Rubber Co., 127 IN". Y. 84; Fowler v. Bowery Savings Bant, 113 K. Y. 450; Conrow v. Little, 115 X. Y. 387; MoUer v. Tuska, 87 N. Y. 166. 'See Bowen V. True, supra; Smith v. Knapp, 30 N^. Y. 581; Elwood v. Gardner, 45 N. Y. 349; Madge v. Ping, 71 X. Y. 608; McGovern v. Payn, 32 Barb, 83; Decatur V. Goodrich, 44 Hun, 3, as to cases in which the order of arrest may be set aside or the defendant discharged from imprisonment on execution. 8 Wheeler v. Allen, 51 N. Y. 37. See Western R. R. Co. v. Bayue, 75 K. Y. 1. Gkatuitous Commissions. 85 session of the defendant ; but the contract is not the foundation of the action. An action in the nature of assumpsit, it is true, may be brought directly on tlie contract implied from the bailment ; but an action of trover sounding in tort is brought for the wrongful appropriation of the property.* The action of trover lies against a bailee who, having property in his possession under a stipulation to dehver it at .a particular place, on a demand made, refuses to deliver it at all. By denying the right of the bailor he makes himself answerable for the property in the proper action. If the demand is made at the wrong place, and he answer that he is readjr to deliver at the right place, there will be no breach of his duty ; but an absolute refusal, though made at a place where he is not bound to produce the goods for delivery, will render any further demand unnecessary.^ This holds true wherever property is in the hands of a mandatary or general bailee, on a trust connected with its custody or disposition ; it must be disposed of, surrendered, or delivered, in the manner, and at the time and place, contemplated in the contract. § 103. The general rule that a bailee of property may maintain an action against any stranger or third party for a loss, injury or conver- sion of the same, applies to a mandatary.' He holds it under a trust ; he has a special or possessory interest in it ; he is answerable for it under his contract with the owner. But his right to recover against a third party is not limited or measured by the liability he is under ; suing in trover he may recover the full value of the property, where he has little if any pecuniary interest in it.* He holds the excess above his special interest in trust for the owner ; and hence in an action against the general owner or one claiming under him, he recovers only to the extent of his interest.^ iSydam v. Smith, 1 Hill, 182; Smith v. Knapp, 30 N". T. 581, 588; Salt Springs Nat. Bank v. Wheeler, 48 N. Y. 492. ^Dunlop V. Hunting, 2 Denio, 643; Scott v. Crane, 1 Conn. 255; Higgins v. Em- mons, 5 id. 76; Slingerland v. Morse, 8 John. E. 474; Mason v. Briggs, 16 Mass. 453; 2 Kent's Comm. 508; Kogers v. Weir, 84 K. Y. 463, 471; Long Island Brewery Co. v. Fitzpatrick, 18 Hun, 389. 8 Ante, §§ 37 and 69; Kellogg v. Sweeney, 1 Lansing, 397; S. C. 46 N. Y. 291 ; Moran V. Portland, 35 Maine, 55; Faulkner v. Brown, 13 Wend. 63. * Bowen v. Fenner, 40 Barb. 383; Bass v. Pierce, 16 Barb. 595; Paddock v. Wing, 16 How. Pr. 547; Buck v. Kemsen, 34 N. Y. 383; Greene v. Clark, 12 N. Y. 343; Little V. Fosset, 34 Maine, 545; White v. Bascom, 28 Vt. 268. 6 Lyle V. Barker, 5 Bin. 457, 460; Spoor v. Holland, 8 Wend. 445; Russell v. But- terfield, 21 Wend. 300, 303; Allen t. Judson, 71 N. Y. 77; Fowler v. Haynes, 91 K. Y. 346; White v. Allen, 133 Mass. 423; Ehoads v. Woods, 41 Barb. 471; Seaman v. Luce, 23 Barb. 240; Chadwick v. Lamb, 29 Barb. 518; Fitzhugh v. Wiman, 9 N. Y. 559. 86 Law of Bailments. § 104. The rule allows either the general owner of property or the bailee to maintain an action of trover for a conversion of it, or an action on the case for an injury to it ; ' the right to sue is indispensable to each to protect his particular interest, and is given for that purpose. In a bailment determinable at the pleasure of the bailor, either may bring an action of trespass or the action of trover ; and as the law does not suffer a defendant to be twice harassed for the same cause, a judg- ment in the first suit will be a bar to any further action." .Vs a general rule, the bailee may recover against a third party for injuries to the goods by force or negligence, to the full extent of the loss or damage ; having a definite interest, as hirer for a term or for a specified purpose, he recovers damages commensurate with the injury to the property, and holds the excess above his interest in trust for the general owner ; ^ having the possession of the property as a mere mandatary, liable over under his contract, he also recovers to the full extent of the loss or injur v.* And in these cases a recovery by the bailee is a bar to an action by the general owner. § 105. The general owner of chattels, let on hire for a defmite term, cannot maintain trespass or trover for a conversion or for an injury to them during the continuance of the term, because these actions can only be maintained by a party in possession or having a present right of possession ; * and also because the general ovmer, by a recovery in trover or in trespass of the full value of the property, might thereby overreach and appropriate his bailee's special property ; and this he should not be permitted to do.^ Hence during the continuance of a bailment on hire for a given term, the general owner's true remedy against a stranger for an injury to the goods is by an action on the case.' But where the bailee has put an end to the contract of bailment by any wrongful act, the general ovmer may maintain an action of trover for the property, agauist a purchaser with knowledge, or against 1 Smith V. James, 7 Cow. 328. 2 Greene v. Clark, 12 N. Y. 343; DiUenback v. Jerome, 7 Cow. 294; and as to right of action by bailor, see note to case on pp. 300, 301; and Chadwick v. Lamb, 2!) Barb. 518; and Bush v. Lyon, 9 Cow. 52; Orser v. Storms, 9 Cow. 687; Nicholls v. Bastard, 2 Cromp. Meeson & Eos. 659. 8 White V. Webb, 15 Conn. 302; Benjamin v. Stremple, 13 111. 466; Wliite v. Bascom, 28 Vt. 269; Little v. Fossett, 34 Maine, 545. * Kellogg V. Sweeney, supra; Moran v. Portland, supra. 6 Gordon v. Harper, 7 T. R. 9, 12; Swift v. Moseley, 10 Vt. 20S; Thorp v. Burling, 11 John. E. 285; Bush v. Lyon, 9 Cowen, 52; Forth v. Pursley, 82 111. 152. ' Hasbrouck v. Lounsbury, 26 N. T. 598. ' Gordon V. Harper, supra; Farrant v. Thompson, 5 Barn. & Aid. 826- Howard v. Farr, 18 X. H. 457. GnATTJiTOtrs Commissions. 87 the bailee ; ^ and trespass or replevin against the purchaser in bad faith who takes the property, under the unauthorized sale.^ § 106. Burden of Proof . In actions against the mandatary, as in others, the burden of proof rests on the plaintiff to establish his cause of action, by proving each material fact necessary to create the liabil- ity.* If the plaintiff in an action of case alleges the delivery of money, inclosed in a letter, to the defendant, and that he undertook and prom- ised to take care of and carry the same safely from one place to an- other, and then dehver the package to the plaintiff ; and that, although a reasonable time had elapsed, the defendant had not done so ; the plaint- iff will be bound to show, among other things, that the money was lost by the defendant's negligence, or could not be obtained on request. By showing a demand and refusal to deliver the package after a reasonable time, he will be entitled to recover, unless the defendant account for the loss by showing the package lost without fault on his part, that is, without gross negligence.* The evidence that the defendant refused to give any information in respect to the package, would change the bur- den of proof from the plaintiff to the defendant ; or, submitted to the jury without explanation, it would be sufficient to render the manda- tary liable. § 107. When the mandatary has converted the property to his own use, and an action in the nature of trover is brought against him for the conversion, the burden of proof lies on the plaintiff to show that the defendant has assumed to himself the property and right of disposing of the plaintiff's goods. ^ The action assumes that the defendant came lawfully into possession of the goods, and it is sustained by showing a breach of the trust, or an abuse of such lawful possession. This famil- iar principle is applicable to choses in action as well as to chattels. If the mandatary, intrusted with the goods of another, puts them into the hands of a third person, contrary to orders, it is a conversion." So, if he be intrusted with a promissory note to be used in a specified man- ner, and he dispose of it differently, it is a misuse or disposition of the note contrary to orders, which will sustain the action.' Even where the 1 Swift V. Moseley, 10 Vt. 208; Morse v. Crawford, 18 Vt. 499; Camp v. Mitchell, 34 Miss. 449. 2 Ely T. Ehle, 3 N. Y. 506. 8 Williams V. East India Co., 3 East K. 192; Doorman v. Jenkins, 2 Adolph and Ellis K. 80; Hayes v. Kedzie, 11 Hun. 577. * Beardslee v. Richardson, 11 Wend. 25; Coykendall v. Eaton, 55 Barb. 188; New- stadt V. Adams, 5 Duer, 47; Boies v. Hartford, etc., E. E. Co., 37 Ct. 272. 5 Baldwin v. Cole, 6 Mod. 212; McCombie v. Davies, 6 East. 540. « Syed V. Hay, 4 Term Eep. 260; Kowing v. Manly, 49 N. T. 193. ' Mm-ray v. Burling, 10 John. E. 172; Decker v. Mathews, 5 Sand. 439; 12 K. T. gg Law of Bailments. plaintiff has repossessed himself of the thing bailed, the action may be sustamed for the breach of trust, which is a conversion ; ' and the amount of the recovery will depend upon the nature of the case.. If it be a negotiable note, which has been transferred for value to a bova fide holder, and afterwards paid by the plaintiff, the recovery will be for the face of the note ; and the plaintiff may recover the face of the note without proving payment.'^ § 108. In order to mamtain an action in the nature of trover against a mandatary, who always comes legally into possession of the property, it is necessary to show a demand and refusal, or an actual conversion, ^ The rule was held differently where the possession itself was tortious, which is an actual conversion.* The general principle is that a demand and refusal, as against one who has chattels in trust for another, are prima facie evidence of a conversion ; ^ but this evidence may be over- come by counter testimony, going to negative the presumption of a con- version arising from such refusal on demand. The effect of the demand will depend upon the present relation of the parties at the time it is made ; if the defendant refuse to dehver the goods according to con- tract, he having the possession, he becomes liable for them." § 109. An action m the nature of trover against a bailee does not 313; Thayer v. Manley, 73 N". T. .305; Powell v. Powell, 71 N. Y. 71; Develin v. Cole- man, 50 N. Y. 531; Hynes v. Patterson, liS Hun, u^S; Bunger v. Eoddy, 70 Ind. 26. 1 2 Esp. X. P. 190, 101; Ingalls v. Lord, 1 Cowen E. 240; ante, § 01; Brewster v. Silliman, 38 N. Y. 423, 428. 2 2 Esp. N. P. 190, 191; Ingalls v. Lord, 1 Cowen E. 240; Decker v. Mathews, supra. ^ This is the general rule where the original possession of the defendant was lawful and not tortious. Loveless v. Fowler, 79 Ga. 134; Sager v. Blain, 44 N". Y. 445, 448; Goodwin v. Wertheimer, 99 N. Y. l.J3; Yeager v. Wallace, 57 Pa. St. 305; Carleton V. Lovejoy, .54 Me. 445; Eyerson v. KaufHeld, 13 Hun, -387. * Bates V, Conkling, 10 Wend. 389; Brown v. Cook, 9 John. E. 301. A wrongful taking or a wrongful sale constitutes an actual conversion, and no demand before suit is necessary. Levi v. Booth, 5x ilil. 305; Hake v. Bueli, 50 Mich. 89; Howitt v. Estelle, 92 111. 218; Ehoades v. Drummond, 3 Col. 374; Waller v. Bowling, 108 X. C. 289; Smith V. .Jensen, 13 Col. 213; Follett v. Edwards, 30 111. App. 386; Blakey v. Doug- lass, 10 East. Eep'r (Pa.) 746. Where there has been an actual conversion a demand and refusal are unimportant. Knevick v. Eogers, 26 Minn. 344. 5 Packard v. Getman, 4 Wend. 613. 6 1 Taunt. 391 ; 4 Esp. 157. The use of the property in a manner different from that agreed upon with the owner of it; Beach v. Earitan A- Del. Bay E, \\. Co., 37 X. Y. 457; Malone v. Eobinson, 77 Ga. 719; or the unauthorized use of it; Gove v. Watson, 61 N. H. 136; is a conversion of it. An imauthorizcd sale of the property by the pledgee is a conversion; Lawrence v. Maxwell, 53 X. Y. 19; unless waived or not ob- jected to; Bryan v. Baldwin, 52 X. Y. 232. And upon the same principle a pledge of property by one to whom it was entrusted for sale is a conversion of the property, Xichols V. Gage, 10 Oregon, 82. So if an agent entrusted with property to sell at a price to be approved by his principal sells without such approval, he is liable for a Gratuitous Commissions. 89 lie for negligence, nor for goods lost or taken from him ; ^ it proceeds upon the assumption that he has usurped the right of property over them, by converting them to his own use.^ Coming lawfully into the possession, it must be shown that he has sold or otherwise converted the goods.* Where, however, the title is in the plaintiff, and it is shown that the property was wrongfully taken from his possession, the burden will be cast upon the defendant of showing that he came to the possession of the property, by purchase or bailment, and without any fault on his part.* This again, it seems, will transfer the burden of proof to the plaintiff, to show a demand of the property, and a refusal, or some other act of conversion.* § 110. The action, in the nature of assumpsit for money had and re- ceived, may be brought against a bailee or trustee who has converted the property into money ; but in order to maintain this action against two trustees jointly for money had and received to the use of the cestui que trust, the plaintiff must prove a joint promise, either express or im- plied. The fact that each of the defendants, who are trustees under an assignment for the benefit of creditors, has admitted tlie receipt of ftmds equal to the demand of the plaintiff, one of the creditors, and expressed his willingness to distribute the same according to the terms of the trust, does not raise an implied promise, such as will support an action at law against the defendants jointly, as for money had and received. Each trustee is answerable for his own acts only ; this is the general rule ; and the law will not imply a joint promise on the separate state- ments or admissions of each." Property delivered and received as money will support the action IDrecisely the same as if money itself had been delivered and received.' conversion. Comley v. Dazian, 114 N. T. 161. A refusal to deliver on demand is evi- dence of a conversion at the time of the refusal. Roberts v. Berdell, 52 N. T. 644. Refusal to comply with a proper and formal demand is not Ipso facto conversion. It is only a fact from which a wrongful conversion may be inferred, provided the cir- cumstances are such as to warrant that inference. Blakey v. Douglass, 10 East. Eep'r (Pa.) 746; Salt Springs Nat. Bank v. Wheeler, 48 N. T. 492 ; Andrews v. Shat- tuck, 32 Barb. 396. 1 Salk. 655 ; 5 Burr. 2825 ; Bromley v. Coxwell, 2 B. & P. 438; Cairns v. Bleecker, 12 Johns. 300; Jervis v. JoUiffe, 6 Johns. 9; Salt Springs Nat. Bank v. Wheeler, 48 N. T. 492. 2 Storm V. Livingston, 6 John. E,. 44. 8 Barrett v. Warren, 3 Hill, 348; Acker v. Campbell, 23 Wend. 372; %I'Carty v. Vickery, 12 John. K. 348. * Barrett v. Warren, 3 Hill, 348, 351. 5 Bates V. Conkling, 10 Wend. 389. »De Forest v. Jewett, 2 Hall E. 130. ' Ainslee v. Wilson, 7 Cowen E. 062. 90 Law of Bailjosnts. And it is not necessary in all cases to give positive evidence that the defendant has received money belonging to the plaintiff ; but where, from the facts proved, it may fairly be presumed the defendant has received the plaintiff's money, the plaintiff may recover in this action for money had and received to his use.^ In general, this action cannot be supported unless the defendant has in fact received money to the plaintiff's use.^ § 111. A recovery in trover for the value of goods, and a satisfaction of judgment, vests the property In the defendant ; because this gives to the plaintiff, at his suit, an equivalent for his property in damages. There is no dissent from this rule, as a single aflftrmative proposition.* In some of our States, the recovery of the judgment alone is held to work a transfer of the property ; on the ground that by bringing this action the plamtiff elects to convert his demand into a judgment for the value of the property, which becomes a chose in action transferable like any other security.* In many cases the plaintiff has an election to bring assumpsit, tres- pass, replevin, or trover ; and as a rule he is held to the logical conse- quences of his election ; he recovers subject to the defenses and principles applicable to that form of action which he adopts.'^ On the same ground, the plaintiff, by adopting the action of trover, is said to elect to recover damages in lieu of his property — an inference which would be of con- trolling weight in favor of anybody but a wrong-doer. The title is not changed by the act of conversion, nor by the exercise of acts of ownership over the property. The owner of timber may re- 1 Tuttle V. Mayo, 1 John, E. 132. 2 Beardsley v. Root, U John. E. 465. 8 OsterhoutY. Roberts, 8 Cowen, 43; Curtis v. Groat, 6 John. E. 168; Thurst v. West, 31 N. y. 210, 215; Sharp v. Gray, 5 B. Monroe, 4; Jones v. McNeil, 2 Bailey S. C. 466; Lovejoy v. Murray, 3 Wallace, 1-19; 2 Kent's Com. 387, 388; Marsden v. Cornell, 62 N. T. 215, 220; Curtis v. Groat, 6 Johns. 168; Thayer v. Manley, 73 X. T. 30-'3, 309. " Floyd V. Browne, 1 Eawle. 121 ; Fox v. The Northern Liberties, 3 Watts & Serg. 103; Carlisle v. Burley, 3 Maine, 2.j0; Loomis v. Greene, 7 Maine, .386; Murrell v. Johnson, 1 Henning & Munford, 450; Hunt v. Bates, 7 E. I. 217; Buckland v. John- son, 15 Com. Bench, 145, 157. The recovery of an unsatisfied judgment for a conver- sion does not have the effect of transferring title to the property converted in Con- necticut. Atwater v. Tupper, 45 Conn. 144. 5 Hunter V. Prinsep, 10 East. 378; Frothingham v. Morse, 45 N. H. 545; Baker v. Cory, 15 Cftiio, 0; Coffey v. National Bank of Mo., 46 Mo. 140; May v. Le Claire, 78 U. S. 217. If the plaintiff waives the tort and sues in assumpsit, the defendant is not permitted to set up his tort to defeat the action, and the recovery of a judgment will bar a further action ex delicto by the plaintiff. Putnam v. Wise, 1 Hill, 240, note; Hill v. Davis, 3 N. H. 384; Stockett v. Walkin's Admrs., 2 Gill. & J. 326, 342; May v. Le Claire, 78 U. S. 217. Geatuitous Commissions. 91 claim it when made into shingles,^ or converted into coal,'' notwithstand- ing it has lost its primitive form. So long as he can prove its identity, he may foUow and retake it in whatever new shape it may have been wrongfully made to assume. By bringing his action of trover, the owner makes his election to demand the value of the property.' But proof that the defendant refused to deliver it on demand shows a con- version at the time when the demand is made ; the refusal being itself a conversion, it is doubtful whether the defendant would be permitted to show a prior act of conversion with a view to a reduction of damages ; since that would be permitting him to found a defense upon his own wrongful act.* § 112. As a general rule, the measure of damages in the action of trover is tlie value of the property at the time of the conversion, with interest from that date ; a rule which is applied in all cases where the property has a fixed value.^ Interest on the value from the date of the conversion is a necessary part of a complete indemnity.^ The law cannot favor a wrong-doer ; hence where the plaintiff is de- prived of some special use of the property, or where the property natur- ally fluctuates in value like stocks, the owner has been allowed to recover the highest value of the things wrongfully converted, down to the day of the trial ; certainly he is not limited to the value of the property on 1 Betts and Church v. Lee, 5 John. R. 349; 5 Hen. VII. 15; 12 Hen. VIII. 10; May V. Le Claire, 78 U. S. 217. See Silsbury v. McCoon, 3 N. T. 379; Cavin v. Gleason, 105 ZST. T. 256, 261; Guckenheimer v. Angevine, 81 N. T. 394, 397; Newton v. Porter, 69 N. Y. 138, 137. 2 Curtis V. Groat, 7 John. R. 168; Babcock v. Gill, 10 John. R. 237. 2 Dillinghackv. Jerome, 7Cowen R. 294; Kennedyv. Strong, 14 John. R. 12S; Baker V. Wheeler, 8 Wend. R. 505 ; Suydam v. Jenkins, 3 Sand. Superior Ct R. 628, and the cases there cited. * As the wrongful conversion of property does not deprive the owner of his title, he may transfer that title to another, who, upon a demand and refusal of the person in possession to surrender the property, may maintain an action against him for the con- version. Although the previous owner of the property might have brought an action for conversion, he was not bound to do so, and the previous wrong on the defendant's part is no excuse for his failure to deliver it when demanded by the second owner. There is no doubt but that there may be a second conversion. Serat v. Utica, etc., E'yCo., 102N. T. 681. 5 Andrews v. Durant, 18 N. T. 496; Beecher v. Denniston, 13 Gray (Mass.), 354 j Di.xon V. Caldwell, 15 Ohio St. 412; Kennedyv. Strong, 14 John. R. 128; Clark v. Pinney, 7 Cowen R. 681; Neiler v. Kelly, 69 Penn. St. 403; Simpson v. Alexander, 35 Kansas, 225; Allen v. Kinyon, 41 Mich. 281; Hopper v. Haines, 71 Md. 64. BMcCormick V. Penn. Central R. R. Co., 49 N. T. 303, 315; Hurd v. Hubbell, 26 Conn. 389, 483; Tates v. Mullen, 24 Ind. 277; Negus v. Simpson, 99 Mass. .388. See Mercer v. Vose, 67 N. Y. 56; McCollum v. Seward, 62 N. Y. 316. S2 Law of Bailments. the day of the conTersion ; ^ since that rule would give the wrong-doer the opportunity to take another man's property and hold it with a view to an increase in its value, and would give to the trespasser all the advantages of a purchaser under a fair contract of sale. Damages for the use of the property, in its original shape, are legitimate ; = and no reason can be assigned to prevent the owner from recovering the value of such use, instead of interest on the value of the property. In re- plevin the jury are required to assess the present value of the property, and the damages for its detention. Special damages are not often recoverable ; being duly alleged, they may be recovered when they are the natural or proximate consequence of the wrongful act ; ^ as where money and time are expended in search- ing for chattels wrongfully taken or appropriated.' Special damages resulting from the effect produced upon the owner's business are too remote ; ^ unless the action is brought to recover the team or the tools with which he prosecutes his business." By reason of a certain difference in the natural bias of mind existing among jurists, the rule of damages appears in two forms or phases ; the affirmative form gives to the owner the value of his property at the time it was taken from him, with interest from that date, as an indem- nity for the injury he has sustained ; and the negative form, or the ex- ceptions from that rule, seem to be framed with the design of pre- venting the wrong-doer from gaining any advantage through his wrongful act. Hence the affiLrmative or general rule applies wher&the conversion takes place without malice, or without any intent to invade the rights of property; and it is evident that the tendency of opinion iRomaine v. Van Allen, 26 X. T. 309; Burt v. Butcher, 3-t X. Y. 493; Scott y. Rogers, 31 X. Y. 676; JIusgrove v. Beckendorff, .""jo Penn. St. 310; Ellis v. Wire, 33 Ind. 127; Lobdell v. Stowell, .51 X. Y. 70; Markham v. Jaudon, 41 X". Y. 235; Groot V. Gile, 51 X. Y. 431. In the absence of circumstances calling for exemplary or special damages, the true measure of damages in an action for the conversion of stocks is the highest intermediate value of the stock between the time of its conversion and a reasonable time after the owner has received notice of it to enable him to replace it. Wright V. Bank of Metropolis, 110 X. Y. 237; Colt v. Owens, 00 ST. Y. 308; Gruman V. Smith, 81 X. Y. 25 ; Galigher v. Jones, 129 TJ. S. 193. For the measure of damages under the statutes of California, see Cal. Civil Code, § 3330. ^Shotwell V. Wendover, 1 John. E. 65; Allen v. Fox, 51 N. Y. 502; Siiydam v. Jenkins, 3 Sand. 014, 021 ; Haviland v. Parker, 11 Mich. 103. 3 Starkey v. Kelly, 50 X\ Y. 077. * Bennett v. Lockwood, 20 Wend. 223; McDonal.I v. Xorth, 47 Barb. 530; Forsyth V. Wells, 41 Penn. St. 291; Davis Sewing Machine Co. v. Best, 50 Hun, 76; Arzagav. Villalba, 85 Cal. 191. . . 6 5 Brizsee v. Maybee, 21 Wend. 144. " Bodley V. Reynolds, 8 Q. B. 779. See Hurd v. Hubhell, 20 Conn. 389. Gratuitous Commissions. 9S is towards a uniform rule, giving tlie owner tlie value of his property with interest from its conversion, or the value with interest from a reasonahle time thereafter.^ Under the English practice the court will sometimes stay the pro- ceedings, on the defendant's paying the costs and restoring the subject of controversy, where no special damages can be claimed for the con- version, and where the value of the property remains unchanged. Though this practice be scarcely known in this country, it assumes the usual rule of damages, and also allows the plaintiff an opportunity to recover damages for the detention as well as for the depreciation of the property.^ In the action of replevin, this practice and the rule with its qualifications are manifestly convenient and just; "and the same result may be wrought out under our practice by an offer to allow judgment.* § 113. Notwithstanding the Code has obliterated the distinction be- tween actions at law and suits in equity, and abolished the well-known, forms of actions previously used in this State, the remedies by suit re- main still essentially unchanged ; ° because the principles of law remain as heretofore. The plaintiff must allege facts that constitute a cause of action, and the allegations of his complaint must show a right of re- covery under principles previously applied to the actions of replevin, case, trover and the others.^ The statement contained in his complaint must include every fact necessary to establish a right of action known to the law. And, since the principles of the common law, as well as the principles of pleading under it, must be studied and learned chiefly from the decisions which have been made under forms of action now disused, it is evident that the plaintiff's complaint must be drawn with 1 Matthews v. Coe, 49 N. T. 57; Baker v. Drake, 53 N. T. 211, overruling Markham. V. Jaudon; Wyman v. Amer. Powder Works, 8 Cush. 168; Eoblnson v. Barrows, 48 Maine, 186; Cushman v. Hayes, 46 111. 145; Bates v. Stansell, 19 Midi. 91; Page v. Fowler, 39 Gala. 412; Pinkerton v. Manchester E. R. Co., 42 N. H. 424. 2 Fisher v. Prince, 3 Burr. 1363; Whitlenv. Fuller, 2 W. Black, 902; Earlev. Holder- ness, 4 Bing. 462. See Stevens v. Low, 2 Hill, 132. ' Allen V. Fox, 51 N. Y. 562. Our practice is different. Brewster v. Silliman, 38 K. T. 423, 428. * Code of Civil Pro., § 738. The offer may be made to allow judgment for the prop- erty; but it must in all cases be explicit and definite, ilarble v. Lewis, 53 Barb. 432; Tompkins v. Ives, 36 N. Y. 1~>. 6 Hall V. Southmayd, 15 Barb. Eep. 32; Horner v. Wood, id. 371; Barker v. Eussell, 11 Barb. Eep. 303; Eodgers v. Rodgers, id. 595. A suit in equity and an action at law may be combined. Davis v. Morris, 36 N. T. 569; Code of Civil Pro. §484. • 8 Boyce v. Brown, 7 Barb. Eep. 80, and the cases there cited; Eldridge v. Adams, 54 Barb. 417. 94 Law op Bailments. at least a tacit reference to the requisites of pleading used in some one of those forms. ^ Though the statute has abolished the forms, it has not separated them from the adjudications which hare blended them together through a long course of years. The terms, assumpsit, case, trover, etc., convey the idea of distinct and well-known causes of action, so that it is still more convenient to use them in speaking of legal principles than to adopt the circumlocution necessary to express the same ideas in popular language. The single term, trover, which has been so commonly used as a remedy for the violation of the contract of mandate, describes a cause of action brought for the unlawful detention or conversion of goods ; in which the plaintiff's right to them, their value, and the defendant's conversion of them, were put in issue and necessary to be proved.- The plaintiff must have either a general or special property in the goods, and a right to the immediate possession; and where the defendant is a mandatary, it must be shown that he has been guilty of some breach of trust, which the law regards as a conver- sion of the property to his own use. We describe the suit accurately under the new procedure, by calling it an action in the nature of trover.^ § 114. Th.e Contract^ hoio deterivraed. The death of the mandatary, leading the mandate wholly unexecuted, works no change in the title to the property ; ^ and where the trust is of a personal nature, his repre- sentatives must have the liberty of restoring the property and thus terminating the contract.^ And unless by the terms of the bailment ' Childs V. Hart, 7 Barb. Rep. rwO; Rayner v. Clark, 7 Barb. 581; Garvey v. Fowler 4 Sand. R. (;6.5. 2 Tharpe v. Stallwood, 5 Mann, and Gr. Till; Armory v. Delamirie, 1 Strange, .505; Meny y. Greene, 7 Jlees. and A\'. (il'.J; Tell v. Beyer, :;s X. Y. 161. In an action for conversion tlie alleyalion of xalue is not a traversable one, and even on default, where all the traversable averments ar.; taken as admitted, the plaintiff must prove bis dam- ages if he seeks to recover more than a nominal amount. Connoss v. Meir, 2 E. D Smith, 314, and cases cited; Raymond v. Traffarn, 12 Abb. Pr. 52; McKensie v Far- rell, 4 Bosw. Ifl2, 202; De Graaf v, Wyckoff, \?> Daly, i^no; Starry. Cragin, 24 Hun, 177; Duffus v. Bangs, (U Hun, 2.;. See Thompson v. Halbert 109 N" Y 329 8 The Manhattan Co. y. Bentley, l.S Barb. Rep. 641; Conway y. Bush, '4 Barb. Kep. :jb4. The cause of action must be stated in the complaint, and the de- fense properly pleaded, and the judgment must follow according to the allegations and proof; the Code has not changed this settled rule of practice. Wright y! Dela- fleld, 2.5 N. Y. 266. And as a rule, a pleading which is sufficient in the action of as- sumpsit at common law, is sufficient under the Code. Farron v. Sherwood 17 N. Y. 227. Suing on a special contract which he has fulfilled, plaintiff may recover on the old count of indebitatus assumpsit. Hosley y. Black, 28 N. Y. 438. * Hurd y. West, 7 Cowen, 7.'52. 5 Eoulston y. McClelland, 2 E. D. Smith, 60. Gratuitous Commissions. 95 some third party has acquired a vested interest in the property, the bailee's executor or adminstrator will be justified in restoring the same to the mandator.^ On his death the mandatary's goods and effects pass into the custody of his legal representatives, aud although a personal trust will not thus devolve upon them, they will be bound to take care of the property coming into their hands, and should be held liable for at least an equal degree of care as that required of the deceased in keeping it. Though they do not come under the mandatary's exact contract, they do become bailees or custodians of the property in the due course of business. In respect of an ordinary contract, it is their legal duty to fulfill it accord- ing to its terms ; the estate is under the obligations of the contract, and entitled to the moneys growing due thereon.^ In respect to property held in trust, the rule is that it does not pass to the legal representatives, but goes to the party for whom it is held.' So far as accrued liabilities are concerned, the legal representatives are liable ; they represent the deceased and must answer for his debts and torts beneficial to the estate, e. g. the conversion of personal property.^ The law makes no provision for the execution of a specific trust by the legal repre- sentatives ; it leaves them to the liabilities growing out of the relation voluntarily assumed by them.^ They receive the trust property as individuals ; ^ it is not to be deemed assets in their hands, unless the liability of the deceased has really assumed the form of legal liability. In some cases the character of the property will depend upon the facts to be ascertained on investigation ; '' and here they will receive it conditionally. As between themselves, neither is entitled to exclude the other from the custody or possession of the property.' § 115. "When the mandatary has money in his hands due to a third person, and dies, he leaves his estate indebted for that amount, and it is the duty of his legal representatives to discharge the debt ; ^ but where 1 Carle v. Bearce, 33 Maine, 337; Britton v. Aymar, 23 La. Ann. R. 63. 2 Riblet V. Wallis, 1 Daly, 360, 365. 3 Moses V. Murgatroyd, 1 John. Ch. 119. The property will not pass to an assignee in bankruptcy. Kip v. Bank of K. T., 10 John. E. 63. « Brocket v. Bush, 18 Abb. Pr. 337. 5 See Banks v. Wilkes, 3 Sand. Ch. 99; Bowman v. Rainetoux & Sabbatton, 1 Hobb. Ch. 150. « The statute specifies what shall be assets in their hands, not including any such trust property. See Levin v. Russell, 42 N". T. 251. ' Scoville V. Post, 3 Edw. Ch. 203; Champney v. Blanchard, 39 N. Y. 111. 8 V.\Mt V. Burt, 41 N". Y. 46. 8 Ante, §§ 86, 97. 96 Law o:f Bailments. he has a package of money or goods in his possession for a third party whose property they are, and dies, his legal representatives acquire only the bare custody of the articles ; they come into the possession of the property without any express authority from the owner, and are to he held liable for it, not as executors or administrators, hut on the same general ground as the finder of goods. ^ § 116. Under the general rule of the common law, the death of one of two or more persons jointly authorized to act for another arrests the execution of the power.^ And hence where joint mandataries are authorized to do some private act requiring their consultation and con- currence^ the death of one dissolves or puts an end to the power ; * in other words, where an authority to act in a matter of a j^rivate nature is conferred by the principal upon more than one person, all must act in the execution of the power, unless it is given in such terms as will authorize its execution by a less number.^ An authority conferred upon a firm cannot he properly executed by the members that remain in business, after its dissolution ; " and an authority given by a firm is withdrawn by a change in its members with notice.® § 117. The death of the mandator puts an end to all authority to enter upon any new business or engagements in his name. Money or personal property in the hands of an agent or mandatary, at the death of the principal, goes to his representatives ; and where the authority to complete the mandate is thus terminated, the law imposes upon the mandatary the duty to restore the thing bailed to the party who repre- sents the estate, or to the owner where the property belongs to some other party. The law will imply an obligation to surrender the trust in a way that shall be agreeable to equity ; ' and it seems the acts of an agent or mandatary, before notice of the death, done in good faith in the execution of the contract, will be held binding upon his principal's estate ; " as where he completes a transaction or receives a payment on behalf of his principal.^ 1 Ante, §§ 19, 90, 100, 10.3; McGehee v. Mahone, 37 Ala. 2.58. niartine v. International Lite Ins. Society, .53 ^>^. Y. 339; Stlsnermann v. Cowing, 7 John. Cb. 275; Tooke v. Hollingworth, 5 Term E. 215. ' Sinclair v. Jackson, 8 Cuwen, 54:!. * Hawley v. Keeler, 53 X. Y. 114, 121. 6 Martine v. International Life Ins. Soc, 53 N. Y. 339; Hamilton v. Mutual Life Ins. Co., Blatch. 235. ^ Callanan v. Van Vleck, 36 Barb. 324; 41 K. Y. 619. ' Farrow v. Bragg, 30 Ala. 261; ] Bell's Com. § 413, 4th ed. X Nicolet's Admr. v. Pillot, 24 Wend. 240. The agent ought to be protected. See Ilowr. V. Buffalo, N". Y. & E. R. R. Co., 37 N. Y. 297. Ca ;-!i lay v. ^[cKensie, 4 Watts & Serg. 282; Carriger v. Whittington, 26 Mo. 313. Gkatuitotjs Commissions. 97 A power of sale, coupled with an interest in goods, capable of being executed in the name of the agent, may be executed after the principal's death ; as where a factor makes advances upon and receives goods for sale, and is not reimbursed on the death of his principal.^ The factor has an interest in the property, like that of pledgee, and a sale by him, contemplated from the first, is only a reasonable mode of realizing his interest in the goods. An agency cannot outlive the principal ; ^ imder this rule of the com- mon law it is evident that an agent or mandatary can only be protected in such acts and dealings in the business entrusted to him as the situa- tion naturally calls for. He must preserve the property and surrender it to the parties entitled to receive it. * § 118. A mandate may include an authority to contract; and as the power is withdrawn by the death of the mandator, it is often necessary to fix the precise time when the contract is complete. In a sale negoti- ated by letter, the offer to sell, standing open and unretracted, becomes a contract of sale as soon as it is accepted ; even though the person mak- ing the offer die before he receives knowledge of the fact.' As in other 1 Edwards on Factors and Brokers, §§ 86, 87; Ish v. Crane, 8 Oliio St. .520; Story on Agency, § 496. 2 Hunt T. Kousmanier, 8 Wheat. 174, 201; Smout v. Ilberry, 10 Mees. &Welsby, 1; Megary v. Funtis, 5 Sand. 376; Park v. Hammond, 6 Taunt. 49.5. 3 Mactier v. Frith, 6 Wend. 103 ; Vassar v. Camp, 11 N. T. 441 ; Taylor v. Mer- chants' Fire Ins. Co., 9 How. U. S. 370 ; Trevor v. Wood, 36 N". T. 307 ; Pothier, Trait du Contrat de Vente, § 2, Art. 3, No. 32. The passage from Pothier is as follows : In order that this consent may take place where the contracting parties are in differ- ent places, it is necessary that the will of the party who has written to the other, pro- posing a sale, should continue until his letter has reached the other party and he has declared that he accepts the offer. This will is presumed to have continued, if nothing appears to the contrary. But if I have written to a merchant at Livourne a letter proposing to sell him a particular article for a specified price, and before my letter has been received by him, I write to him a second declining to make the contract, or if before that time (i. e., before my letter is received and the offer contained in it accepted) I am dead, or have lost the use of my reason, although the merchant at Livourne, ignorant of my change of will, death, or loss of reason, should, on receiving my letter, accept the offer contained in it, there would be no contract of sale ; for my will not having continued down to the time when this merchant had received my letter and accepted the proposition contained therein, there was not that concurrence or meeting of our minds required to make a contract of sale. This is the opinion of Bartholus and of the other doctors of the civil law quoted by Bruneman, ad. I. 1, § 2, ff, de con- trat empt, who have correctly rejected the contrary opinion of the commentary ad dictam legem. This doctrine, says Mr. Justice Marcy, which presumes the continu- ance of a willingness to contract, after it has been manifested by an offer, is not con- fined to the civil law and the codes of those nations which have constructed their sys- tems with the materials drawn from that exhaustless storehouse of jurisprudence ; it is found in the common law ; indeed, it exists, of necessity, wherever the power to 7 98 Law of Bailments. cases, the contract is complete as soon as the minds of the parties meet. Of necessity the person making the offer to sell by letter must be con- sidered as making it during every instant of time his letter is passing to its destination ; and if the party addressed presently or within a reason- able time write a letter of acceptance and mail it, the contract is com- plete. It is necessary that the minds of the contracting parties should meet on the subject and terms of the contract, but not necessary they should know that they meet m order to create the contract.^ The mail- ing of the letter of acceptance properly addressed, or the sending of a telegram where the offer is made by telegraph, completes the contract.^ contract exists in parties separated from eacli other. (0 Wond. 11.5.) In Vassarv. Camp, decided in the Court of Appeals in this State, Jlr. Justice Nelden observes : Tliis precise question has been so fully considered in several modern cases, that it would be a work of entire supererogation to discuss it here. It arose in England in the case of Adams v. Lindsell (1 Barn, and Aid. C.Sl). In that case an offer to sell wool was made through the mail. The offer was received by the plaintiffs on the 5th of SeiJtember, who wrote and mailed their answer, accepting the offer, the same even- ing ; but this answer was not received until the 9th of September by the defendants, who in the meantime, supposing their offer had not been accepted, had sold the wool to otherparties. The action was for the non-delivery of the wool ; and if the contract was regarded as consummated on the 5th of September, when the answer accepting the offer was mailed, the defendants were liable ; but if not until its receipt on the 9th, then no liability attached. The court held unanimously that the contract became obligatory on the 5tli, when the answer of the plaintiffs was deposited in the mail. In the case of Mactier v. Frith, the same question arose in this State, and was elaborately discussed by our late Court of Errors. The court in that case, by an almost unani- mous vote, affirmed the doctrine of Adams v. Lindsell, in opposition to that of Mc- Culloch V. The Eagle Insurance Company (1 Pick. -!7S), in which the Supreme Court of Massachusetts had adopted a different rule. The decision in Mactier v. Frith has since been followed in our own State in the case of Brisban v. Boyd (4 Paige, 17); in the State of Connecticut, in the case of Averill v. Hedge (12 Conn. 424) ; in Pennsyl- vania, in the case of Hamilton v. Lycoming Ins. Co. (5 Barr. 3.39); and in Georgia, in Levy V. Coke (4 Georgia R. 1). The question has again arisen in England, and been passed upon by the House of Lords there, in the case of Dunlop v. Higgins (12 Jurist. 295). In that case, the case of Adams v. Lindsell is referred to and confirmed in the niost decided and unequivocal terms. The doctrine of this case, therefore, and that of Mactier v. Frith, must be considered as too firmly settled, both in this country and in England, to be shaken or doubted. It is moreover maintained, in the cases referred to, by the most satisfactory and conclusive reasoning. (1 Kernan P.. 446, 447.) iMcCuUoch V. Eagle Ins. Co., 1 Pick. 278, is not followed. 2 Hunt V. Higman, 70 Iowa, 400 ; Ferrier v. Storer, 63 Iowa, 4S4; Bryant v. Boozee, 55 Ga. 438 ; Washburn v. Fletcher, 42 Wis. 152; Greer v. Chartiers E. E. Co., 90 Pa. St. ••»!; Minnesota Oil Co. v. Collier Lead Co., 41)111. 431. The rule stated in the text is supported by the cases above cited, subject to the qualification that the offer is standing and the acceptance is made within a reasonable time. The party making the offer has the right to impose the condition that the acceptance shall be receive 1 by him within a time limited, or by return mail. Union Nat. Bank v. Miller, 106 N. C. Gratuitous Commissions. 99 There are certain qualifications of this rule: 1. Where the party sending the offer retracts it by letter or by telegraph by a communication reaching the party addressed before his letter of acceptance has been written and mailed, an acceptance will not create a contract.^ 2. Where the party receiving the offer does not write and post his letter of accept- ance within a reasonable time, no contract will arise.^ 3. Delajs ;nd miscarriages by mail do not prevent the completion of the contract ; the post-office being the agent of both parties.'' The law relating to contracts negotiated by telegraph or by mail is framed to promote the convenience of the business community. § 119. There are several ways in which the contract of mandate may be terminated, so far as the right of control over the property is con- cerned. If the mandator become insane or an habitual drunkard and a guardian or committee be appointed of his person and estate, the right of control must necessarily pass to the guardian or committee.* If a feme sole mandator marry, the title to her goods and chattels passes under the common law to her husband, and with it the right of control •over them.* If the mandator become a bankrupt and his estate passes into the hands of an assignee, the right to demand and receive it super- sedes the authority under which the goods were delivered.^ A valid assignment for the benefit of creditors must have the same effect as an absolute sale. These several transfers operate upon the authority un- der which the mandatary holds the goods ; in some instances they oper- ate to convert the contract of mandate into a simple deposit, arresting 347; Lewis v. Browning, 130 Mass. 173; Maclay v. Harvey, 90 III. .525; Taylor v. Kennie, 35 Barb. 272. If not so received there is no contract. Id. An offer sent by telegraph invites or authorizes a reply by the same mode of communication. Trevor V. Wood, supra ; In re Imperial Land Co. of Marseilles ; Wall' s Case, 5 English R. (Moak.) 686, and cases there cited. If a proposition is made by mail and an acceptance is for- warded by a messenger, the contract will be complete at the time the acceptance is delivered to the messenger to be carried, and not from the time of the delivery of the acceptance to the proposer. Fox v. Turner, 1 III. App. 153. But the contract does not become complete on the delivery of an acceptance to a third person to deposit in the post-office. Maclay v. Harvey, 90 III. 525. 1 Taylor v. Merchants' Fire Ins. Co., 9 How. U. S. 370; Thompson v. James, 18 Dunlop, 1 ; School Directors v. Trefethreu, 10 111. App. 127. 2 Averill v. Hedge, 12 Conn. 424; Ferrier v. Storer, 63 Iowa, 484. * Duncan v. Topham, 8 C. B. 225 ; Vassar v. Camp, supra; Thompson v. James, supra. * Wadsworth v. Sharpsteen, 8 N. T. 388; Leonard v. Leonard, 14 Pick. 283. 5 Udal V. Kenny, 3 Cowen, 590, 599. It is otherwise under the present law of this Sta' e. (iage v. Dauchy, 34 N". T. 293. '' Matter of Cook, 2 Story, 376; Exp. Newhall, 2 Story, 360; Merritt v. Forrester, 4 Taunt. 541; Parker v. Smith, 16 East, 382. 100 Law op Bailments. the object of the mandate, and leaving the mandatary still bound to keep the property with ordinary care.^ A seizure of the property under process against the mandator, with notice to him, will operate to dissolve the contract. The mere insol- vency of the mandatary, where the owner is willing to rely upon his. fidelity, will not terminate the trust.^ As the mandatary acts gratuitously, having no interest in the subject of the bailment as against his principal, the mandator may at any time revoke the mandate. He has a right to recall the trust and resume possession of the property ; or he may transfer the property to another, and with it the right of revocation.^ To make the revocation of the trust effectual, notice must be given to the mandatary ; ^ but this may be done by the appointment of another to relieve him of the trust.' 1 Tracy v. Wood, 3 Mason, 132. 2 Williams v. East India Co., 3 East, 192; Doorman v. Jentins, 3 Adolph. & Ellis, 80. 8 Hodges V. Hurd, 4'7 111. 363. *Salt V. Field, 5 Term R. 215. 6 Copeland v. Mercantile Ins. Co., 6 Pick. 198. Geatuitous Loans. 101 CHAPTER IV. GEATUITOUS LOANS. § 120. A gratuitous loan of goods for temporary use, to be after- "wards returned, creates a bailment ; the title does not pass. A loan of •articles to be returned in kind, as money, corn, cattle, and other things that may be valued by number, weight, or measure, is a contract of an- other class ; it is a^ale. The absolute property is transferred to the borrower ; the understanding of the parties is that he shall consume or sell or otherwise appropriate it as his own.^ As in a loan of money, the intention is that the borrower shall make use of it as his own, and the law therefore treats it as his property. It is the mutuum of the civil law ; a contract frequently adopted in connection with a lease of lands, to enable the tenant to stock his farm and carry on the business with a complete control over it. The contract was formerly much used in Scotland, and the grain or cattle thus leased under a stipulation that the like property in quantity and quality should be returned at the end of the lease, were called steelbow goods.^ § 121. A loan of things to be returned in kind resembles a loan for a temporary and gratuitous use only in form ; there is no real simihtude between the two contracts. But there is often a close resemblance be- tween a bailment for hire and a sale : a delivery of wheat to a miller to 1 2 Kent' s Comm. 573, 574. In a loan or letting of cattle or sheep for a certain term, at the expiration of which they are to be returned with others, we have a bailment : in a loan of cattle or sheep under a contract giving the party receiving them the op- tion to replace them with so many other cattle or sheep as good, we have a sale. Hurd V. West, 7 Cowen, 752; Otis v. Wood, 3 Wend. 498. Contracts providing for an ex- change of grain for flour (Smith v. Clark, 21 Wend. 88) ; or of logs for lumber (Pierce V. Schenck, 3 Hill, 28) ; are familiar illustrations of the rule, and have been construed as contracts of sale and not of bailment. See also, Bartlett v. Wheeler, 44 Barb. 162; Weir V. Hill, 2 Lansing, 278; a rather speculative contract; Carpenter v. GriflBn, 9 Paige Ch. 310. A contract giving the right to consume the property may withhold the title until it is consumed; Armington v. Houston, 38 Vt. 448; and there may be dif- ferent interests or rights of property created in the same goods. Wood v. Orser, 25 N". Y. 348. 2 Carpenter v. GriflBn, 9 Paige Ch. 310; see Ives v. Hartley, 51 111. 520; and Loner- gau V. Stewart, 55 111. 45 ; and Inglebright v. Hammond, 19 Ohio, 337 ; a loan of money, see Chiles v. Garrison, 32 Mo. 475. 102 Law of Bailments. be ground and returned in the form of flour, five bushels of wheat for one barrel of flour, is a bailment, where by the contract the miller is to return the flour produced from the wheat delivered ; the title does not pass ; it is an agreement for work and services. On the other hand, an exchange of wheat for flour, under a contract which leaves the mil- ler at liberty to dehver flour of a given quality, produced from any wheat, is a double sale ; the title to the wheat passes on delivery, and so does the title to the flour. The miller agrees to purchase the wheat and sell the flour ; he is therefore bound to deliver the flour, though the wheat be destroyed by fire before he is able to grind it.^ The distinc- tion running through all the authorities is very simple and clear : when the identical thing delivered is to be restored, though in an altered form, the contract is one of bailment, and the title to the property is not changed. But when there is no obligation to rest£)re the goods deliv- ered, and the receiver is at liberty to return another thing of equal value, he becomes a debtor to make the return, and the title to the property is changed ; it is a sale.- § 122. A loan of commercial paper, bills of exchange, promissory notes, or other securities for the payment of money, often made by one merchant to another for his accommodation, has but a slight resemblance to a loan of goods or chattels for use. If a man make and deliver his note to a friend without any restriction as to the manner in which it is to be used, he authorizes him to negotiate it for any lawful purpose ; and 1 Norton v. Woodruff, 2 N. T. 153; Chase v. Washburn, 1 Ohio St. 244; Buffum v. Merry, 3 Mason, 478; Ewing v. French, 1 Blackf. 353; South Australian Ins. Co. v. Eandell, 6 Moore P. C. (X. S.) 341. Seymour v. Brown, 19 John. 44, is overruled. Hurd V. West, 7 Cow. 752. 2 Mallory v. Willis, 4 N". T. 76; Hm-d v. West, 7 Cow. 52; Smith y. Clark, 21 Wend. 83; Bradley V. Mirick, 25 Hun, 272; Marsh v. Richards, 3 Hun, 550; Foster v. Petti- bone, 7 N. Y. 433; Bufemn v. Merry, 3 Mason, 478; Barker v. Roberts, 3 Greenleaf, 101 ; Andrews v. Richmond, 34 Hun, 20. In Mallory v. Willis, supra, there was some difference of opinion as to the interpretation of the contract. The wheat was de- livered to be manufactured into flour, on certain terms, and the question was whethir the flour was to be returned, or so much flom-. In Foster v. Pettiboue, 7 N". T. 4.;.;, a similar question was passed upon, without any dissent upon the rule of law. So in Wadsworth v. Allcot, 6 N. T. 64. In I\es v. Hartley, supra, it was held that a receipt given by a warehouseman in these terms, " Received of H. 134 bushels of wheat left in store, to take market price when he sees fit to sell," imports a sale. Westcott v. Tilton, 1 Duer, 53; King v. Hnmplirey, 10 Ponn. 1 Barr, 217. See Andrews v. Rich- mond, 34 Hun, 20; Irons v. Keutner, 51 Iowa, SS; Johnston v. Browne, 37 Iowa, 200; Nelson v. Brown, 44 Iowa, 455; Ledyard v. Hibbard, 48 Mich. 421; Dean v. Lam- mers, 63 Wis. 331. In the most of these cases the receipt given was construed in connection with extrinsic evidence of the circumstances surrounding the individual transaction and the usage known to the parties, and the character of the contract de- termined from all the cvidenof. Gratuitous Loans. 103 he must pay the note to the holder when it becomes due.^ He loans himself into a debt, unless the borrower pays the note as he ought to. If a man make and loan his note to a friend to be used for a special pur- pose, it is a breach of good faith to use it for any other purpose, and for that reason no party taking the note with knowledge of its misap- propriation, can recover on it against the maker. It being a negotiable note, favored as a commercial instrument, a stranger who takes it before it is due honestly for value, is allowed to recover on it notwith- standing the misuse of the paper. In these cases the borrower, the party accommodated, must indemnify the lender ; the law implies an engagement on his part to do so.^ § 123. A loan of goods or chattels for gratuitous use has all the ele- ments of an ordinary contract, except one ; the use is a gratuity from the lender. There cannot therefore be a valid executory contract of this kind.' After a delivery of the property, the loan is treated as a contract, though it must be conceded that in some features it closely resembles a license to occupy and use real estate.' It confers on the borrower a lawful possession, and it invests him with a special or qual- ified property ; it is as truly a contract as that which is created where goods are delivered to be kept or carried without compensation.^ It con- cerns personal property only, and is distinguishable from a mere Ucense.' § 124. A loan is not to be deemed gratuitous where it is made for the mutual advantage of the lender and borrower ; as where the owner of a horse has no present use for him, and lends him to another person to be worked for his keeping ; ' or where chattels are loaned to the bor- rower for a use which must enure directly to the benefit of the lender ;' or where property is delivered to a party, with the option to purchase and pay for it a certain price within a given time. A conditional deliv- ery, with a view to a sale, operates to give the use for the term of the credit agreed upon ; but it is not the same thing as a gratuitous loan.° 1 Edwards on Bills and Notes, 316-324. 2 Brown v. Taber, 5 Wend. 566; Wheeler v. Guild, 20 Pick. 545; Edwards on Bills and Notes, 374. 8 Crosby v. German, 4 Wis. 3*73; Shillibeer v. Glyn, 2 Mees. and Wels. 145. * 3 Kent's Comm. 452. A license is not assignable, and it is revokable. Crocker v. Cowper, 1 Cromp. Mees. & Bos. 418; Morse v. Copeland, 2 Gray, 302; Pierrepont v. Barnard, 6 N. Y. 279. ^ McCauley v. Davidson, 10 Minn. 418. " All bailments, with or without compensa- tion to the bailee, are founded on a sufficient consideration." « Williams v. Jones, 3 H. & C. 256, 602. f Chamberlain v. Cobb, 32 Iowa, 161. » Carpenter v. Branch, 13 Vt. 161. 9 Bailey v. Colby, 34 N. H. 29; Dunham v. Lee, 24 Vt. 432; Dunlap v. Gleeson, 16 Mich. 158; DeFonclear v. Shottenkirk, 3 John. 170; Harrison v. Marshall, 4 E. D. Smith, 271. See Austin v. Dye, 46 N. T. 500. 104 Law op Bailments. § 125. The terms of the loan prescribe the use to be made of the property, and the tune of that use. Whether expressed or implied, they constitute the conditions of the trust upon which the goods are loaned. That they are treated as conditions, rather than as the mere stipulations of an ordmary contract, is evident from the consequences following a breach of them. If a carriage be borrowed for a special use, or a horse to go a particular journey, and they be used differently, it is a breach of the trust under which they are loaned, and the borrower is liable for any loss or injury to them, even by accident. E. g.^ if a horse be lent to go to London, and he be driven towards Bath in another direction the borrower becomes responsible for any casualties that may happen in the journey towards Bath. Driving the horse beyond the place desig- nated is held a conversion of the property, which will support the action of trover.i On a loan of a chattel for a given use for a day, a week, or a month, there is an implied understanding that it shall be returned at the time agreed upon ; and it has been held that a failure to return it is a con- version of the property.- And though this ruling can scarcely be sup- ported on sound principles,^ it is quite clear that a contiuued use of the chattel after the time specified ought to be held a conversion ; on the ground that such unauthorized use is a wrongful appropriation of the property. A failure to fulfill a promise, express or implied, may be a breach of contract; but the circumstances must be very peculiar, where such a failure could be deemed a conversion. On the other hand, a man who uses another's goods in violation of his instructions, and for his own advantage, commits a tortious act.' § 126. The parties to the contract of loan, as in other cases, must have a legal capacity to make a contract. This is important to be borne m mind, since it may affect materially the remedy of the lender, for an injury to the chattel loaned, under a contract which cannot be en- forced at law.= Thus, the contract of an infant is not void, but voidable at his election. If a horse is lent to him to go a journey, there is an implied promise that he will makes use of great care and diligence t.. protect the animal from injury and return him at the time agreed upon. But if he pleads his infancy, no action can be maintamed against him on ^ 1 Coggs V. Bernard, 2 Ld. Eaym. 909, per Chief-.Justice Holt; Wheelock v. Wheel- right, 5 Mass. .104. An unauthorized use of the animal is a conversion of him Col- lins V. Bennett, 4(j N. Y. 490. 2 Clapp V. Nelson, 12 Texas, 370; Lay's Exr. y. Lawson's Admr., 2;J 11a :177 Eoss V. Clark, 27 Miss. Jones, 54!). '^^"^T;.^- ^"'^^^'•'l- 2"^ N. H. 07; and Collins y.Bennetl, supra. See also, Went- worth V. McDuffie, 4S N. H. 41 )2, 40S-a case of over-driving a hired horse " Campbell v. Stakes, 2 Wend. E. 1:;7. Gkattjitous Loans. 105 this implied promise. If he should sell the horse, an action would lie, and his infancy would not protect him ; ^ for that is an election on his part to disafB.rm the contract. And so if he be guilty of any wilKul and positive act of injury to the animal, an action of trespass lies against him for the tort ; ^ though he is not answerable on his agreement for injuries resulting through his unskillfulness, or want of knowledge and discretion.^ The law releasing him from the binding force of his con- tract is based on the presumption that he has not yet acquired those very qualities of knowledge and discretion ; and consequently he cannot be held responsible on his promise, express or implied, to exercise care and diligence. He is liable for torts, not on matters arising ex coji- tractuJ^ § 127. Married women at common law have not a legal capacity to contract ; but in respect to matters usually intrusted to her, the wife may act as the agent of her husband ; in his absence, the wife is con- sidered to have a general authority over his property, which must be possessed by some one, unless it be expressly shown that he has con- stituted some other person his agent for that purpose.^ If the husband intrusts the wife with money to make deposits in some bank for safe keeping, and she does so, opening an account in her own name, and afterwards withdraws the money, it seems the court will presume she acted with authority.^ But the contract is that of the husband, since the wife cannot contract in her own name. A loan to her, unless it be made with the authority of her husband, will not raise the usually implied contract by the borrower, though if it have his assent it will be the same as a loan to him. Her act with his assent binds him ; it is his. The common law disabilities of married women having been removed by statute in this State, and the wife having been given fuU power to contract in her own behalf, much of the ancient lore in regard to the contracts of husband and wife have become obsolete. In respect 1 Vasse V. Smith, 6 Cranch's Rep. 226. 2 Campbell v. Stakes, 2 Wend. 137; Eaton v. Hill, 50 N. H. 235. So if the infant hires a horse to go to a particular place and goes in a different direction, or hires a horse to go a fixed distance and goes beyftnd it, he is liable in tort. Homer v. Thwing, 3 Pick. 492; Towne v. Wiley, 28 Vt. 353; Wentworth v. McDuffie, 48 N. H. 402; Fish v. Ferris, 5 Duer, 49. s Jennings v. Randall, 8 Term R. 335; Green v. Greenbank, 4 Eng. Com. Law Rep. 377; 2 Marsh Rep. 485; Eaton v. Hill, 50 K. H. 235; Campbell v. Stakes, 2 Wend. 137. * Homer v. Thwing, 3 Pick. 492; Hanks v. Deal, 3 McCord's Rep. 257; Bristow v. Eastman, 1 Esq. Rep. 172; Wallace v. Morss, 5 Hill R. 391; Medbury v. Watrous, 7 HiU R. 110; Moore v. Eastman, 1 Hun, 578; Stud well v. Shapter, 54 N. Y. 249. « Church V. Sanders, 10 Wend. R. 79. SDacyv. The Chemical Bank, 2 Hill, 550; Miller v. Delamater, 12 Wend. 433; Edgerton v. Thomas, 9 N. Y. 40. 106 Law of Bailments. to the other disabilities of parties, it is not necessary here to enter further into the subject ; it is sufBcient to say, they are similar in all contracts.^ In general, married women, under the common law, and infants, lunatics, and other persons not sui juris, are not capable of contracting, nor can they appoint an agent or attorney to act for them ; ^ but infants and married women, as we have seen, may act as agents for others.^ A married woman may now take and hold a separate property the same as if she were unmarried ; she may carry on business, and buy and sell and mortgage her goods and chattels,* and she may with equal right borrow and hold chattels to her own use, without subjecting her husband to any liability on account of them. § 128. The Borrower s Interest. Under a loan for use, the possession and a transient special property are transferred for the time and use agreed upon ; the borrower takes an interest in the things loaned — what the law calls a special or qualified property. Pie acquires the possession to which the law attaches the right to protect the property by action against a wrong-doer. He has an interest in the custody and safety of the property, because he is answerable for it to the lender ; and this pos- sessory interest will enable him to maintain an action against any third party who wrongfully hiterferes with the thing loaned.^ The borrower is liable over on his contract to the lender ; this is the ground upon which the law gives him his right of action against third parties. His actual liability in a given case does not appear to be necessary ; it need not be shown to enable him to maintain an action ; for there are situations in which he would be entitled to recover, though not himself chargeable with any breach of duty towards the lender.^ 1 Story on Bailm. § 229. 2 Snyder v. Sponable, 1 Hill's E. 567; Whitmarsh v. Hall, 3 Denio, 375; The People V. Moores, 4 Denio, 518; Dominick v. Michael, 4 Sand. R. 37i!; Smith v. Oliphant, 2 Sand. E. 306-711; Crippen v. Culver, 13 Barb. S. C. 424. 3 Co. Lit. 52 a; Chastain v. Bowman, 1 Hill's South Car. E. 270; Eiley v. Suydam, 4 Barb. E. 222. * Van Sickle v. Yan Sickle, 8 How. Pr. 205; Talman v. Hawkshurst, 4 Duer, 221; Second Nat. Bank v. Miller, 63 X. T. 639; Jones v. Walker, 03 X. Y. 012; Laws lSfl2, Chap. 594. 6 2 Black. Comm. 452, 453; Burton v. Hughes, 2 Biug. 173; Hurd v. West, 7 Cowen, 752; Nichols v. Bustard, 2 Cromp. Mees. & Eos. 659; Bliss v. Schaub, 48 Barb. 339; Hendricks v. Decker, 35 Barb. 298; Duncan v. Spoar, 11 Wend. 54; Paddock v. Wmg, 16How.Pr. 547; Van Winkle V. The U. S. M. S. Co., 37 Barb. 122; Kissamv. Eoberts, 6 Bosw. 154; Chamberlain v. West, 37 Minn. 54. " Kellogg V. Sweeney, 1 Lansing, 307 ; S. C. 40 X. Y. 291 ; Chamberlain v. West, 37 Minn. 54. In Kellogg v. Sweeney, supra, the bailee was a guest at .an inn and re- covered from the innkeeper gold coin deposited with the clerk and subsequently stolen. Gratuitous Loans. 107 § 129. The possession of the borrower is not that of a mere servant, and it does not exclude that of the owner, who may in most cases main- tain an action for the conversion of the goods by a stranger ; and a judgment obtained in his favor will be a good bar to a suit brought in favor of the bailee. Either of them may bring the action, because the bailee's possession is that of the owner, and possession under the right- ful owner is sufficient against a person having no color of right.^ When the bailee has no interest or claim to hold the goods, coupled with his possession, the rule of law applies that the general property draws after it the possession ; ^ so that the owner has the right of immediate possession. Without doubt the lender, who loans chattels for an indefinite time, retains the constructive possession of them, and is entitled to reduce the goods to actual possession at his pleasure ; ^ and it seems he has the power by strict right at all times to revoke the loan,* and repossess himself of the property which forms its subject. This right of revoca- tion may in some cases work injustice towards the borrower, where he has borrowed an article for a particular purpose, which remains unac- complished at the period chosen by the lender to revoke the loan. Un- der the Roman law and other codes derived from it, the lender was not permitted to terminate the contract otherwise than as contemplated by the parties to it.^ But at common law, it appears the borrower, like the bailee under the contracts of mandate and deposit, has no legal in- terest in the subject of the bailment as against the bailor. The lender, having the general property in the loan, has the right to reduce it to his actual possession whenever he pleases, and is therefore constructively all the whUe in possession ; so that under the old practice he could sus- tain the action of trespass de bonis asportatis.^ Story intimates the opinion, that notwithstanding the lender's right to The hirer of a horse is liable to the owner for injuries to the horse through the negli- gence of the servants at an inn at which he is stopping. Hall v. Warner, 60 Barb. 198. But liability on the part of the bailee to the bailor is not essential to the right of the former to recover the value of the property from a stranger .who has converted it or caused its loss through negligence. Chamberlain v. West, 37 Minn. 54. 1 Falkner v. Brown, 13 Wend. 68; 2 Saund. 47; Sutton v. Buck, 2 Taunt, 309; Bliss- V. Schaub, 48 Barb. 339, 343. 2 Thorp V. Burling, 11 John. E. 285 ; Hall v. Tuttle, 2 Wend. 475. 8 Orser v. Storms, 9 Cowen E. 687; Smith v. Miles, 1 T. R. 480; Neff v. Thompson, 8 Barb. 213, 216; Pulliam v. Burlingame, 81 Mo. 111. * 5 Bac. Ab. Tresp. (C), pi. 9, 16, 17 ; Putnam v. Wyley, 8 John. E. 433; 2 Camp. B. 464; Story on Bailm. § 277. * Story on Bailm. § 257. «Rootv. Chandler, 10 Wend. R. 110; 7 Term E. 12; 3 Day, 498, 272; Herring v. Hoppock, 15 N". T. 409, 412, 414; Ash v. Putnam, 1 Hill, 302, 306. 108 Law of Bailments. terminate the contract of loan whenever he pleases, still if he do so un- reasonably, while the object of the bailment is but partly accomplished, and actually occasions injury or loss to the borrower by so doing, the latter may have a suit for damages ; or may recoup his damages in an action brought against him for retaining the loan under such circum- stances.^ As no authority is cited for this opinion, its weight must de- pend entirely upon general principles. The owner of a pair of horses lends them to his neighbor to carry a load of provisions to a particular market ; can he, on the way, meet him and demand the immediate pos- session of the team, leaving the borrower to sustain the injury resulting from such an abrupt and unexpected termination of the loan ? ^ It may in this case well be questioned whether the contract of loan for this special purpose, united to the injury resulting to the borrower from its termination before the purpose has been answered, will not justify the borrower in resisting this demand for immediate possession, and be re- ceived as an adequate defense. § 130. Lender's Interest in the Loan. The title to the tiling lent, as we have seen, remains in the owner ; the use only being transferred to the borrower." The earlier writers speak of the borrower as havuig a special or qualified property in the subject of the loan ; * more recently it is asserted that he has no special property in the borrowed chattel' But this variation of language does not show any variation of principle. The bailee has an interest in the goods bailed, which, in the old action of trover, was frequently spoken of as a special property, in contradis- tmction from the naked possession held by a mere servant;" the mere servant could not, while the bailee might maintain the action as against strangers and wrong-doers.' Cowen, in speaking of the distinction be- tween general and special property, says ; " Special property is where a man holds goods by bailment, or has any temporary interest therein, 1 Story on Bailm. § 2.58. " The ground of this doctrine, as stated in the Koman law, IS, that although it is purely a voluntary act to make the loan, and to prescribe the terms thereof; yet when once it is made, the lender would, by an unreasonable withdrawal of the loan, impose a biuden rather than a benefit, and thus violate the implied obligation between the parties." The doctrine laid down by Story lias sub- stantially been incorporated into the statutory law of California. See Cal Civil Code § 1894. ' ' 2 Eoot V. Chandler, 10 Wend. R. 110; Bac. Abr. TtX. 8 2 Kent's Comm. 574. * Doct. and Stud. D. 2 c. .aS; Bac. Abr. 873; 2 Black. Comm. 4.53 « 2 Kent's Comm, 574 ; Story on Bailm. §§ 279, 93-96, 1.50 ; Taylor v. Linday, 9 East R. 49; Burton v. Hughes, 2 Bing. E. ns. « Falkner v. Brown, 13 Wend. E. 63. ' 2 Saund. 47; 1 East E. 244; 4 id. 247; Cro. Eliz. 819. Geattjitous Loaj:,'.); 'Williams v. Townsend, 31 X. Y. 411; Trustees, of Union College v. 'Wheeler, 61 N. Y. 88; Hubbell v. Jloulson, 53 N. Y. 225. 5 Brown v. Frost, 10 Paige, 243. One who is not notified or not made a party may redeem; he is not affected. Gage v. Brewster, 31 N. Y. 218; Tuthill v. Tracy, 31 N. Y. 157; Cheney V. 'Woodruff, 45 N. Y. !«; Reynolds v. Park, 53 N. Y. 36, 41; Miner v. Beekman, 50 X. Y. 3.'i7, -Ml. Pledges or Pawks. 141 mortgagee, subject only to be defeated by a performance of the condi- tion ; 1 and his title becomes absolute at law on the mortgagor's failure to pay according to its terms.^ If by the terms of the mortgage the mortgagor is entitled to the possession until the day of payment arrives, he has a possessory interest in the goods and a right of redemption ; the property may therefore be sold on an execution against him, and the purchaser will acquire his interest and the right to redeem.' When the instrument defines the circumstances under which the right of pos- session is to vest in the mortgagee, the inference is that in the mean- time the possession is to remain with the mortgagor ; and in such cases also the mortgagor has a possessory interest in the goods, mi til default is made in the payment.* And when the mortgage, besides defining the circumstances under which the mortgagee has the right to take possession of the property, contains a clause authorizing him to take the possession at any time when he deems himself unsafe, the mort- gagor's interest remains until default is made in payment, or until the mortgagee takes possession in good faith for his own safety.^ The pur- chaser under a sale subject to the mortgage acquires the exact interest of the mortgagor; he does not become personally bound to pay the debt secured by the mortgage.^ 1 Butler V. Miller, 1 Comst. (N. T. Eep.) 496; Blssell v. Pearce, 28N. Y. 252; Shuart T. Taylor, 7 How. Pr. 251; Coles v. Clark, 3 Cush. 399; Bordwell v. Collie, 45 N". T. 494; Hembree v. Blackbiirn, 16 Oregon, 153; Porter v. Parmly, 43 How. Pr. 445. 2 Burdick V. McVanner, 2 Denio, 170; Fuller v. Acker, 1 Hill, 47.3; Brown v. Bement, 8 John. R. 96; Ackleyv. Finch, 7 Cowen, 290; Langdon v. Buel, 9 "Wend. 80; Hudson V. Walter, 34 How. Pr. 385; 39 Barb. 606; Casserly v. Witherbee, 119 N.T. 522; Duffiis T. Bangs, 43 Hun, 52; Bragelman v. Daue, 69 N. T. 69; Moore v. Prentiss Tool & Supply Co., 133 N". T. 144; Sherman v. Slayback, 58 Hun, 255. See Leadbetter v. Leadbetter, 125 N. T. 290 ; Manchester v. Tibbetts, 121 K T. 219; Porter v. Parmly, 43 How. Pr. 44.5. While this doctrine is teclmically and theoretically correct, yet practically the substantial title remains in the mortgagor with all the incidents of a legal title, and he retains the use, control and benefit of the property subject to the mortgage. Moore v. Prentiss Tool & Supply Co., 133 N. Y. 144. SHullT. Carnley, 11 N. Y. 501; S. C. 17 N. Y. 202; Goulet v. Asseler, 22 N". Y. 225. * Hall V. Sampson, 35 N. Y. 274. ^ Hathaway v. Brayman, 42 IS". Y. 322. It is clear that if a person takes property under such a clause in a mortgage, not because he deems himself unsafe or the debt insecure, but inspired by other and unjustifiable motives, he will not be protected by the power conferred in the instrument. Hyer v. Sutton, 59 Hun, 40; "Werner v. Bergman, 28 Kansas, 65 ; Forlong v. Cox, 77 111. 293 ; Davenport v. Ledger, 80 111. 574; Roy v. Goings, 96 111. 361. * Hamil v. Gillespie, 48 N. Y. 556. As against creditors the mortgage must be refiled within the year. Porter v. Parmly, 52 N. Y. 185; Tremaine v. Mortimer, 128 N. Y. 1. 142 Law of Bailments. § 180. The right of property drawa after it the right of possession; and when there is no provision in the chattel mortgage giving the pos- session to the mortgagor, the mortgagee, having the right of property until defeated by the performance of the condition, has as an incident thereto the right of possession, and may therefore take the goods into his own custody, or maintain trespass or trover for them against any one who takes or converts them to his own use.^ The danger clause is to he construed by itself ; the mortgagee's right of possession under it does not accrue until he takes action under it ; nevertheless its inser- tion in the mortgage implies an understanding between the parties that the mortgagor is to retain the property until the mortgagee deeming himself unsafe takes the possession.'-' § 181. In equity the mortgagor has a right to redeem, even after a default has been made ; he retains the right until it is cut off by a fore- closure or sale under the mortgage. " And he may enforce this right Ijy an action in equity ; ' and in this action he is entitled to an account oi' the rents or reasonable hire of the property, with a view to ascertain the true amount due ; and he ought to be accountable for the reasonable expenses incurred in the keeping of the property, where these exceed its rental value.'' Asking to redeem on equitable grounds, he must do equity ; and he should tender the amount due with interest, including all reasonable charges, before he brings his action. To avoid the pay- ment of costs, he must offer all that equity can require of him in the premises.^ The mortgage usually states the true amount to secure which it is given ; and sometimes it is given to secure contingent liabilities up to a certain amount;'' in this case the mortgagor is entitled to redeem on paying the liabilities particularly specified.' 1 Moore v. Prentiss Tool & Supply Co., 13:3 X. T. 144, 149; Coles v. Clark, 3 Cush. 399; Shuart t. Taylor, 1 How. Pr. 2.")1. See Mattison v. Baucus, 1 N. T. (1 Comst.), 295; and Butler v. Miller, IN. Y. 496; Chadwick v. Lamb, 29 Barb. 518; 13 N. Y. 5.56, 565; Hall v. Sampson, 35 N. Y. 274; S. C. 19 How. Pr. 481. 2 Hall V. Sampson, supra; Huggins y. Fryer, 1 Lansing, 276. "Charter v. Stevens, 3 Denio, 33; Patchin v. Pierce, 12 Wend. 61; Porter v. Parmly, 43 How. Pr. 445; S. C. 52 N. Y. 1S5; Sherman v. Slayback, 58 Hun, 255, 261. 4 Pratt V. Stiles, 17 How. Pr. 211, 221; Hinman v. Judson, 13 Barb. (329, 630; West V. Crary, 47 N. Y. 423. 6 Mickles v. Dillaye, 17 N. Y. 80; a, suit for redemption by the mortgagor of real estate. ^ Brookway v. Wells, 1 Paige Ch. R. 017; Vroom v. Ditmas, 4 Paige Ch. 520, 535; Archer v. (.'nle, 22 How. Pr. 411; Halstead v. Swartz, 46 How. Pr. 289. ' Beers v. Waterbury, 8 Bosw. 396. 8 Tliis is a clear inference from the adjudications. Miller v. Lockwood, 32 N. T. 293, 299. Pledges or Pawns. 143 § 182. The mortgagee is not obliged by law to take any action by way of foreclosure ; he may take possession and hold the property ; after forfeiture, no further act is necessary to give him the legal title. Though the mortgage contains a power of sale, he is not bound to act under it ; but if he takes and retains the goods, and they are in value equal to Ms demand, he cannot afterwards maintain an action for the debt.^ § 183. Payment of the debt extinguishes the mortgage ; - made after, it is a waiver of the forfeiture, and will extinguish the mortgagee's title.' A part payment, or a new security given to the mortgagee, does not impair his rights under the mortgage.* A tender of the amount due after a forfeiture does not take from the mortgagee his legal title ;' and yet it is clear that his acceptance of the money does deprive him of Ms title to the goods. And where he sells a part of them under the power, and realizes from the sale sufficient to pay the debt, his mort- gage is satisfied and he has no title to or interest in the remainder : ^ he has acquired all that the instrument was designed to give him. On the reason of this rule, he cannot at any time safely refuse a tender of the amoimt due ; he certainly cannot without subjecting himself to an action in equity to redeem. Besides, why should a mortgage of goods and chattels be treated differently from a mortgage upon real estate ? Only prudential reasons can be assigned for the different remedies given under them. § 184. The form of chattel mortgage now in general use authorizes the mortgagee, on a default in payment, to take possession of the prop- erty and sell it at pubUc or private sale, and apply the proceeds to the payment of the debt. Under this power it has been held that a fair sale, in good faith, for a reasonable price, will forclose the mortgagor's right to redeem ; and it cannot be denied that such a sale is within the terms of the authority. In the case of a pledge, one object of the sale is to transfer the title ; under the mortgage, the title is already perfect in the mortgagee ; and the object of the sale is to convert the property into its equivalent in money, and apply it on the debt. This being done m the manner agreed upon between the parties, no ground is left for an action in equity to redeem, the only remedy left to the mortgagor.' iBurdickv. MoVanner, 2 Denio, 170; Case v. Boughton, 11 Wend. 106; Stoddard V. Denison, 2 Sweeney, 54; Sherman v. Slayback, 58 Hun, 255, 261. 2 Monnot v. Ibert, 33 Barb. 24. 'West V. Crary, 47 N. T. 423; Park v. Hall, 2 Pick. 206, 210; Barry v. Bennett, 7 Mete. 354. * Patcbin v. Pierce, 12 Wend. 61; Miller y. Lockwood, 32 N. T. 293. ^ Brown v. Bement, 8 John. 96; Koyes v. Wyckofe, 30 Hun, 466. 6 Charter v. Stevens, 3 Denio, 33. ' Chamberlain v. Martin, 43 Barb. 607, and cases there cited. See BaUou v. Cunning- 144 Law of Bailments. The sale must be made pursuant to the terms of the power ; if the authority be to take and sell at public auction, the sale must be made in that manner, or it cannot be effectual as a foreclosure : there must be the usual auction sale, on reasonable notice.^ On a sale in this manner, conducted fairly, the mortgagee may purchase the property ; ^ as he may on a foreclosure sale of real estate. § 185. "When given to secure the payment of money, the mortgage of either real or personal estate is but an accessory or incident to the debt ; and hence a change in the form of the debt does not affect its validity.* An assignment of the debt passes the interest in the mortgage. If by a special agreement the mortgage is not to accompany the debt assigned, it is extinguished and ceases to be a subsisting security.* "VSTiere a mortgage was given to secure a note payable to order, and the holder indorsed the note over, and at the same time delivered the mortgage to the indorsee, but made no assignment of it in writing, it was held that the transfer of the note carried with it the mortgage. The debt is the principal, and the security the incident ; and the assignment of the principal draws after it the incident.^ For the same reason, the creditor may assign the principal debt to a third person, and give him the benefit of a pledge which he holds to secure the payment of the debt. The pledger is not injured by this ; he retams his right to redeem on pay- ment of the amount due on the debt, the same as before the assign- ment ; ° and the assignee acquires precisely the rights of the pledgee subject to the same obligations.'' § 186. Though formerly much blended in the books, there is now a clear discrimination established between a chattel mortgage and a pledge. A pledge of goods or chattels is completed by a delivery of them ; it does not transfer the title ; it only gives to the pledgee a lien ham, 60 Barb. 425; S. C. 4 Lansing, 74; and Stoddard v. Denison, 2 Sweeney 54; 38 How. Pr. 296; 7 Abbott's Pr. N. S. .000. 1 Charter v. Stevens, 3 Denio, 33. 2 Olcott V. Tioga E. E. Co., 40 Barb. 170; S. C. 27 N. T. 546; Casserly v. Witherbee, 119 N. Y. 522; Edmiston v. Bruclier, 40 Hun, 256; King v. Walbridge, 48 Hun, 470; Elliott V. Wood, 45 N. T. 71; Hall v. Ditson, 5 Abb. New Cas. 198. 3 Hill V. Beebe, 13 N. T. 556; Gregory v. Thomas, 20 Wend. 17. « Jackson v. Willard, 4 John. E. 41, 43; Jackson v. Blodget, 5 Cowen, 202; Martin T. Mowlin, 2 Burr. 970; Green v. Hart, 1 John. E. 581. 6 Pattison V. Hull, Cowen, 747, 754; Eluhn v. Bankes, 15 Neb. 92; Cal. Civil Code, §§ 2936; and see Morris v. McCuUoch, 83 Pa. St. 34; Alabama Gold Life Ins. Co. v. Hall, 58 Ala. 1; Langdon v. Buel, 9 Wend. 80; Gould v. Ellery, 39 Barb. 163; Wyman V. Smead, 31 How. Pr. 1, 353. " Chapman v. Brooks, 31 N. T. 75, 84. 'Kemp V. Westbrook, 1 Vesey, 17s; Eatcliff v. Vance, 2 Const. Eep. S. C. 239; Brown v. Warren, 43 X. H. 430. Pledges oe Pawns. 145 upon them.^ The form of the contract is not controlling ; if there be a transfer of the property, it is more than a pledge, it is a mortgage.^ There is no dif&culty in tracing this line of discrimination between a mortgage and a pledge, in contracts relating to goods and chattels. Giving a bill of sale of chattels, with the intention of securing the pay- ment of a debt, or to be held as collateral security for moneys to become due, is to be treated as a mortgage ; it is a transfer of the property, to become void on payment of the debt thereby secured." The law gives effect to the intention with which the bill of sale is executed and deliv- ered ; a separate written or verbal defeasance will convert the bill of sale into a mortgage.^ And the effect of the transfer will not be changed by a stipulation on the part of the assignee to prepare the goods for market.^ § 187. The difference between an absolute conveyance and a mort- gage of lands is broad enough ; and yet there is a class of cases in which a deed is converted into a mortgage ; e. g., when the deed is given on account of a present loan, or precedent debt, with a concur- rent agreement in writing, or by parol, for a redemption at a future time upon payment of the debt.^ The law looks through the forms of the transaction, and seeks to carry into effect the real intent of the par- ties ; and as a rule, where the conveyance is made on an application for a loan of money, it will be deemed a mortgage in case the grantee agrees to receive back his money and interest, or a larger sum, and re- convey the property witlain a specified time thereafter, whatever form the writings may assume, the real object being a loan of money.' Where the conveyance is not ia truth made as a security for a loan, an agreement to reconvey at a future time, at the election of the grantor, affords no evidence that the deed was intended as a mortgage." A col- ' Brownell v. Hawkins, 4 Barb. 494; Cortelyou v. Lansing, 2 Caines' Cas. 200; Brown v. Bement, 8 John. R. 96; McLean v. Walker, 10 John. E. 471, 474; People v. Remington, 59 Hun, 282, 287. 2 Langdon v. Bush, 9 Wend. 80; Bunacleugh v. Poolman, 3 Daly, 236. ' Barrow v. Paxton, 5 John. R. 258 ; Marsh v. Lawrence, 4 Cowen, 461 ; Siedenbach V. Riley, 111 N. T. 560; Smith v. Beattie, 31 N". T. 542; People v. Remington, 59 Hun, 282; Blake v. Corbett, 120 N. T. 327; Woodworth v. "Hodgson, 56 Hun, 236. * Brown V. Bement, supra; Hall v. Tuttle, 8 Wend. 375; King v. Van Vleck, 40 Hun, 68; 109 N. T. 363. 5 Smith V. Beattie, 31 N. T. 542, 544. « Strong V. Stewart, 4 John. Ch. 167; Henry v. Davis, 7 John. Ch. 40; Clark v. Henry, 2 Cowen, 324; Roach v. Cosine, 9 Wend. 227, 231; Horn v. Keteltas, 46 N. Y. 605; Odell v. Montvoss, 68 N". Y. 499; Kraemer v. Adelsbergei-. 122 IN". Y. 467; Simon V. Schmidt, 41 Hun, 318; Erwin v. Curtis, 43 Hun, 202. 'Holmesv. Grant, 8 Paige's Ch. I!. 213; Robinson v. Cropji). i: i'aige's Ch.480. » Glover v. Payn, 19 Wend. 518. 10 146 Law of Bailments. lateral agreement by the grantor to repay the money tends to sho-w that the conveyance was intended as a mortgage ; and the absence of such an agreement tends to prove that it was not so intended.^ § 188. A discrimination must be made between a conditional sale and a mortgage of goods or chattels. A sale and delivery on condition that the purchaser is to acquire the title to the property on payment of the purchase money, does not vest the title in him until the condition is fulfilled.^ By the very terms of the sale, the seller is here to continue the owner until the price is paid, and the transfer takes effect on the payment ; it is not a present sale, with a mortgage back to secure the purchase money ' — a form of contract which includes first a sale, and . second an agreement in the nature of a chattel mortgage for the price to be paid.* The collateral agreement here does not prevent the trans- fer of the title ; and though informal, it is to be treated and must be filed as a chattel mortgage.^ COXTRAOT. I. Capacity to make. II. Right or power to create a pledno. III. Subject of pledge. IV. Mode of making a pledge. V. Relation of pledge to the original contract. VI. Pledgee's duty in preserving. VII. "What Property in the Pledgor and Pledgee ; and resulting Rights and Duties. VIII. Sale or foreclosure. IX. Restitution. X. Remedies. § 189. I. Capacitij to Make. The general rule that the deeds and 1 Conway's Exrs. v. Alexander, 7 Cranch. 218; Flagg v. Mann, 4 Pick. 467. 2 Herring v. Hoppock, 15 N. T. 409; Ballard v. Burgett, 40 N. T. 314; Sargent v. Metcalf, 5 Gray, 506; Hart v. Carpenter, 24 Conn. 427; Rodney Hunt Machine Co. v. Stewart, 57 Hun, 545; Lewis v. McCabe, 49 Conn. 140; Hotchkiss v. Higgins, 52 Conn. 205; Sumner v. "Woods, 67 Ala. 139; Cole v. Berry, 13 Vroom (N". J.), 308; Weeks V. Pike, 60 N. H. 447;'Heinbockle v. Zugbaum, 5 Mont. 344; Warner v. Eoth, 2 Wy. 63; Aultman v. llallory, 5 Xeb. 17S; Segrist v. Crabtree, 131 U. S. 287; McGinnis V. Savage, 29 W. Ya. 362; Dodd v. Bowles, 8 Wash. Terr. 383; Simpson V. Shackleford, 49 Ark. 03; Empire State Type Founding Co. v. Grant, 114 N. T. 40; Perry v. Toimg, 105 J^. C. 403; Russell v. Harkness, 4 Utah,. 197; Luther t. Cote, 61 K. H. 120. 8 Brewster v. Baker, 20 Barb. 304; Grant v. Skinner, 21 Barb. 5S1; Strong v, Taylor, 2 Hill, 3:^0; Barrett y. Pritchard, 2 Pick. 512; Herring v. WiUar.l, 2 Sandf. 4 IS. * Dunning v. St.'arns, 9 Barb. 030; McComljer v. Parker, 14 Pick. 4'.i7. 5 Tliompson w Blancbanl, 4 X. Y. 303. Pledges oj; Pawns. 147 ■contracts of an infant are not void, but only voidable, supplemented by the rule that the defense of infancy is a personal privilege, renders it quite plain that an infant may be a party to a contract of pledge.^ If he delivers goods or chattels in pledge, to secure the payment of his debt, the pledge must remain valid until he repudiates the transac- tion. "Would a sale of the chattels by him operate as a disaflrmance of the contract of pledge ? It would not of itself, because the sale is not inconsistent with the pledge : it does not repudiate the pledge.^ More- over, if the chattels were delivered in pledge at the time his debt was contracted, it would be necessary for him to rescind the whole transac- tion, and restore the consideration received by him when he incurred the debt. The debt having been incurred for property still in his pos- session, he cannot both keep the property and take back that which he has delivered as security for the payment.^ The pledge takes effect by delivery of his hand like a sale and dehv- ery, and hence a rescision will not be implied from a doubtful act ; * nor can it be s§ readily made as it can where he gives a mortgage but does not deliver the chattels covered by it; a subsequent absolute sale and delivery of the chattels disaffirms the contract evidenced by the mortgage.^ § 190. The legal incapacity of a married woman under the common law to contract was not based upon the theory of personal incapacity to transact business ; she was always allowed to act as her husband's agent, with authority.* xVnd her act, with her husband's authority, binds him ; he cannot recall it after it has been executed.'' Her act binds him on the theory of agency, and not on the ground of the marital relation subsisting between them.' Under our recent remedial statutes a married woman may now take and acquire a separate property, and enjoy and transfer the same as freely as an unmarried woman ; and she may carry on any business on her separate account. Entering upon a business, she acts for herself ; 1 Slocum V. Hooker, 13 Barb. 536. This case involves both of the rules referred to. See also, Blake v. Supervisors of L. Co., 61 Barb. 149. 2 Palmer v. Miller, 25 Barb. 399; the case of a deed of premises covered by a morf^ gage made by the infant. 2 Bartholomew v. Fennimore, 17 Barb. 428; Kitchen v. Lee, 11 Paige's Ch. 107; Gray v. Lessington, 2 Bosw. 257; 33 Conn. 201. * Merchants' Fire Ins. Co. v. Grant, 2 Edw. Ch. 544. 5 Chapin v. Shafer, 49 N". T. 407. 8 Goodwin v. Kelly, 42 Barb. 194. ' Griffen v. Banks, 37 N. T. 621, 624; Edgerton v. Thomas, 9 N. T. 40. « Kowing V. Manly, 49 N. T. 192. 148 Law op Bailments. she is treated as a /erne sole} And as she may make all manner of con- tracts relating to the business, she can undoubtedly bind herself by a pledge or mortgage of goods, to secure the payment of debts incurred by her in the Ihie of the business.^ As she may charge her separate prop- erty as surety for the debt of her husband, there is no reason why she may not directly pledge her goods or chattels for his debt.^ Under the first statute, a married woman was empowered to take and hold property to her sole and separate use, and convey the same ; she was not in terms authorized to bind herself by contract ; and though her separate prop- erty was a legal estate, her engagements in reference to it were neces- sarily enforced on principles of equity.^ Under the more recent statute, she may also acquire property from her earnings or business, and m:iY make sales and transfers of the same, and may carry on any business on her separate account ; and is liable on her contracts m the business, and for the manner in which she transacts her business, like an unmarried woman. ^ Under still more recent statutes a married woman may con- tract to the same extent, with like effect and in the same.form as if unmarried, and she and her separate estate will be liable thereon whether the contract relates to her separate estate or business or other- wise, and whether it purports to charge her separate property or other- wise.' § 191. II. Ilii/Jit to mahi a Pledyn. It is of course necessary that the person making a pledge of goods as security for a debt should own them, or at least have the authority to deposit them m pledge. The contract passes a certain interest or special property in the goods to the pledgee ; and the pledgor impliedly stipulates that he possesses the right which he assumes to transfer.' To the extent of that right or interest, he in fact warrants the title as much as does the vendor on an absolute sale ; ^ especially where the debt is contracted at the time the pledge is deliv- ered. If he undertake to pledge property that 1 x.'Ioii-s to another, with- out his consent, he cannot afterwards, so long as the owner does not 1 Lindner v. Soliler, 51 Barb. :;2:i; Peak v. Lemon, 1 Lansing, 2[i."). See Anderson v. Mather, 44 N. Y. 249. 2 Talmon v. Ilawxliurst, 4 Duer, 221. 3 Corn Exchango Ins. ( 'o. v. Babcock, 42 N. Y. 013. " Ilauptman v. Catlin, 2J X. Y. 247; Tale v. Dederer, 18 X. Y. 21;:.; 22 X. Y. 450; Ballin v. Dillayo, :J7 X. Y. :i5. See the statute of 1S4S as amended in 1S40. 6 Anderson v. Mather, 44 X. Y. 249; Eowe v. Smith, 45 X. Y. 2:»; Fairbanks v. Mothersell, (;:) liaii.. 40ij; Warner v. Warren, 4U X'. Y. 22S. « Laws of U:s4, Chap. ;;,S1, as amended by Laws of 1.s:l', Chap. 5'.)4. ' Mails V. 'i'u\lor, 4(1 Penn. St. 460. 8 Burt V. Druvy, 4!) X. Y. 2s:J; Rew v. Barber, :; Cow™, 272, 2Sn; Defreeze v. Trumper, 1 .Jolm. li. 274, Pledges ou Pawns. 149 intervene, claim to have it restored until his debt is discharged.^ So, too, though he is not the owner at the time the pledge is made, if he sub- sequently acquire the property, by what title soever, his ownership will be 'deemed to relate back to the time of tlie contract, and the pledge will stand good.^ Though the right of the true owner is not affected by a pledge made without his consent, the party making the pledge will not be permitted to assert his own want of title.' The civil and com- mon law agree that an implied warranty is annexed to every sale of personal chattels, in respect to the title of the vendor ; and the reason of the rule applies to the case where there is a transfer of goods in pledge, on the creation of a debt.^ § 192. As no one can convey the title to another man's property with- out his consent, so it is quite clear that, as a rule, he cannot pledge it or encumber it without some authority.^ E. g.^ a partner cannot pledge securities or goods belonging to the firm to secure the payment of money advanced to him as an individual." And a trustee cannot pledge stocks held by him in that capacity, to secure the payment of his individual ■debt ; the act is unlawful, and the transfer of the scrip standing in his name as trustee carries with it notice of his want of authority.' The rule must be difEerent where the owner permits his stocks to be trans- ferred to another and held by him as the apparent owner, under a secret trust ; because in this case the owner enables the trustee to appear with the title standing in his name, and to sell the stock as his own. And after he thus sells the stock or pledges it for an advance of money, the honest purchaser or pledgee is protected, while the party who takes the stock in pledge or purchases it in bad faith, or with knowledge of the facts, takes subject to the owner's title.' The same rule applies where an agent to sell is entrusted with the title ; he has the power to sell in 1 He is estopped from setting up a title to the goods subsequently acquired. Gold- stein V. Hart, 30 Gala. 372. 2 Code of Louisana, Arts. 3109 to 3114. s Jarvis v. Rogers, 13 Mass. R., 105; Duell v. Cudlipp, 1 Hilt. 166. * Defreeze v. Trumper, supra; 2 Bl. Comm. 471; Burt v. Dewey, supra; Mairs v. Taylor, 40 Penn. St. 466. « Swett v. Brown, 5 Pick. 178. ° :Ex. parte McKenna, in re Mortimer, 7 Jur. N. S. 588. After a copartnership has heen dissolved by the death of one of the partners, the surviving partner may borrow money to meet the firm obligations and pledge the copartnership property for its re- payment. Durant v. Pierson, 124 N. Y. 444, 452. ' Shaw V. Spencer, 100 Mass. 382, 389. 8 Crocker v. Crocker, 31 N. T. 507; 28 How. Pr. 583 n ; 17 How. Pr. 504. See An- derson V. Nicholas, 28 N. Y. 600; and Calais Steamboat Co. v. Van Pelt, 2 Black. 372. 150 Law of JJailmk^tts. violation of Ms instructions.^ And since a sale or transfer of stock is usually made on the faith of the apparent title, the owner, rather than an innocent purchaser or pledgee for present advances, should bear the consequences of the agent's bad faith. Certainly we find few cases in our reports where, under these circumstances, the owner ventures to. prosecute his title as against such purchasers ; and many cases where he pursues his remedy against his defaulting agent.^ § 193. In the transfer of choses in action or securities, not negotiable,- the rule is that the purchaser or assignee takes them subject to all defenses, legal and equitable, existing in favor of the original debtor or any prior party ; in other words, the assignee takes the exact interest of his assignor ; ^ and a second assignee succeeds to all the rights and becomes subject to all the disabilities of Ms assignor, to all the defenses existing against him.* This being the general rule applicable to chosi-s m action, that class of cases will hardly be much extended in which the pledgee or purchaser is held to acquire the title discharged of a secret trust : a class which stand upon the well established principle, that innocent purchasers for value from an apparent owner, clothed with the legal title, are to be protected. Sales and pledges of goods by factors entrusted with documentary evidence of title are thus pro- tected ; ^ and for a similar reason, a transfer or pledge of stocks, made 1 Parsons v. Martin, 11 Gray (ilass.), Ill; as was done in Clark v. Meigs, 10 Bosw. 337. 2 Markham v. Jaudon, 41 N. T. 235; Baker v. Drake, 58 N. T. 211. 'Bush V. Lathrop, 22 N. Y. 535; Briggs v. Langford, 107 X. Y. (jSO; Decker v, Boice, 83 N. Y. 215; Davis v. Leopold, 87 N. Y. 620; Davis v. Bechstein, 69 N". Y. 440; Bennett v. Bates, 94 N". Y. 354, 363; Hill v. Hoole, 116 X. Y. 299; Greene v. Warnick, 64 N. Y. 220. Latent equities ? See Reeves v. Kimball, 40 Jy". Y. 299. Bush V. Lathrop has been criticised in subsequent cases, and so far modified as to ex- clude from the operation of the principles there laid down the case of the purchase in good faith of a non-negotiable instrument from the assignee of the real owner upon whom he has by assignment conferred the apparent absolute ownership, when such purchase has been made in reliance upon the title apparently acquired by such assignee. This modification is placed upon the ground of estoppel ; and it is held that the real owner has, by the act of investing another with the apparent ownership of the property, estopped himself from disputing the title of one who there- after acquires it in good faith from such assignee. See McNeil v. Tenth Nat. Bank, 46 N. Y. 325; Moore v. Metropolitan Nat. Bank, 55 N. Y. 41; Armour v. Mich. C. E. R. Co., 65 N. Y. Ill, 122. But with the exception mentioned the doctrine of the case stands unquestioned. Fairbanks v. Sargent, 104 N. Y. 108. * Mason v. Lord, 40 N. Y. 476, 4S7. See Fairbanks -i. Sargent, supra, and cases, cited in preceding note. 5 Edwards on Factors and Brokers, §§ 45 to 57. Laws of 1830, Chap. 179, § 3. To bring a case within the operation of the section cited, the factor or other agent must be consciously and voluntarily " entrustel " with the possession of the docu- Pledges ok Pawns. 151 by an agent entrusted with the title, for money advanced upon them, is uplield in favor of a party thus induced to act upon the written evi- dence of title.^ It is hut just that the negligent or careless owner should be left to his remedy against his unfaithful agent.^ Third parties, acting on the indicia of title furnished by the true owner, should not be deprived of securities so taken in good faith. § 194. The general principle is that the person making a pledge can convey to the pledgee no greater interest in the thing pledged than he himself possesses. The exceptions to this rule only serve to make it plain. £J. ; JXaxwell v. Eeed, 7 Wis. -58:!. See comment upon the rule in Shapley v. Abbot, 42 N. Y. 443, 451; and in Wilcox ^. Hawley, 31 X. Y. 64'^, 053. The like policy, founded in motives of hmnanity, prevailed at a very early day. For example. Pledges or Pawns. 159 views of policy and humanity the householder having a family is not permitted to divest himself of the protection of the law ; and the pen- sioner is not allowed to anticipate his living. But so far as his means will permit, every man is bound to pay his debts ; and there is no law to prevent him from paying his debt with money derived from any source, or from depositing exempt property as a pledge for its payment.^ § 204. Independent of the statute, a pension given for past services, whether it be regarded as an indefeasible right, or as an allowance pay- able during the pleasure of the government, is an assignable interest ; it is quite distinguishable from the compensation presently accruing to officers and soldiers for their services. The effect of an assignment by an officer of his pay or salary yet to be earned would be prejudicial to the public service ; it is therefore against the policy of the law to hold it assignable.^ The half pay granted to an officer, contemplating a possible recall to service at a future day, is treated in the same way as his pay for present services.' The public has an interest in his life, and is concerned in his reasonable support ; on this ground the statute law often interposes to prevent the sale or assignment or pledge of a pension.* in the Mosaic law no one was permitted "to take a widow's raiment to pledge." * * " No man shall take the nether or the upper millstone to pledge : forhetaketha man's life to pledge." * * " When thou dost lend thy brother anything, thou shalt not go into his house to fetch his pledge ; thou shalt stand abroad, and the man to whom thou dost lend shall bring out the pledge abroad unto thee ; and if the man be poor thou shalt not sleep with his pledge. In any case thou shalt deliver him the pledge again when the sun goeth down, that he may sleep in his own raiment, and bless thee; and it shall be righteousness unto thee before the Lord thy God." — Beut. xxvi. 6, 10-13. 1 Frost V. Shaw, 3 Ohio St. 270. Exempt property may be transferred as security for an indebtedness even after a levy thereon. Bishop v. .Tohnson, 15 State Eep. 579; and see Livor v. Orser, 5 Duer, 501. To the rule that exempt property may be the subject of a valid pledge there is one statutory exception. A pledge of exempt prop- erty as security for a debt contracted for the purchase of intoxicating liquors is void. Laws of 1842, Chap. 157, § 3. No pawn can be taken of any Indian within this State for any spirituous liquor. Laws of 1813, Chap. 29, § 5 ; Laws of 1849, Chap. 420, § 2. And it is also made unlawful for any white person under any pretense, or on any account whatever, to receive from an Indian of certain tribes any article or articles whatever by way of pawn or pledge. Laws of 1817, Chap. 143, § 1. 2 Bliss V. Lawrence, 58 N. T. 442, and cases there cited; Wells v. Foster, 8 Mees. and Wels. 149; Field v. Chipley, 79 Ky. 269 ; Bowery Nat. Bank v. Wilson, 122 N. Y. 478; Billings v. O'Brien, 4 Daly, 556; Beal v. McVicker, 8 Mo. App. 202; Bangs v. Dunn, 66 Cal. 72; Hill v. Paul, 8 CI. & Fin. 293; Cooper v. Eeilly, 2 Sim. 560. See Thurston v. Fairman, 9 Hun, •")84. 8 Flarity v. Odium, 3 T. E. 681; Lidderdale v. Duke of Montrose, 4 T. E. 248; Stone V. Lidderdale, 2 Anstr. 533. * Ex parte Batline, LL. D. 4 Add. and Ellis, 690; Pridrty v. Eose, 3 Merrivale, P5, IQQ Law of Bailments. § 205. It was formerly doubted whether incorporeal things, like debts and scrip of stock, which cannot be manually delivered, could be the proper subjects of a pledge— a doubt no longer, and now of no m- terest except as it indicates the order in the growth of the law. For it is at length perfectly settled that any legal or equitable mterest what- ever in personal property maybe pledged; provided the interest can be put, by actual delivery or by written transfer, into the hands or within the power of the pledgee, so as to be made available for the satisfaction of his debt. Shares of stock can be so transferred by an instrument in writing, and thus made a collateral security for the payment of borrowed money.i A negotiable note or bond may be so transferred by a simple delivery ; being payable to bearer, or to order and properly indorsed, a delivery places them in the power of the transferee.^ § 206. The distinction between a mortgage and a pledge of personal property is perfectly settled ; under a pledge the title does not pass, it remains in the pledgor ; under a mortgage the title passes, subject to a condition of defeasance. Plain as this distinction is, it requires some discrimination to draw the line between a mortgage and a pledge of choses in action, there being in each case a formal transfer of the prop- erty. When the transfer is made as a mere security for a debt, it is always a pledge ; if the transfer be made in terms to secure the payment of moneys due, or if that be the fair interpretation of the transfer, it creates a pledge.^ A written transfer of goods or chattels is interpreted on the same principle ; it creates a pledge, where that appears to be the intention of the parties ; and the circumstance that the value of the goods exceeds the amount of the debt tends to show the intention of the transfer.' § 207. There is a contract in use in Louisiana known as an anticresis ; 102; Kow V. Dawson, 1 Ves. 331;. Davis t. Duke of Marlborough, 1 Swan, 70; Grenfell V. Dean and Canons of Windsor, 2 Beaven E. 544. 1 Wilson V. Little, 2 Comst. (2 N. Y.) 443, 445; S. C. 1 Sand. R. 351; Eomaine v. "\'an Allen, 20 X. Y. 309; 41 N. Y. 235, 241; Morris Canal & Banking Co. v. Fisher, 1 Stockt. R. 607. 2 HaysT. Eiddle, 1 Sandf. E. 24S; Bank ofthe State of X. Y. r. Vanderhorst, 1 Kobt. i;. 211, holding that tlie j^ledgee receiving a note on a discount or loan is a bona fide holder for value; S, C. :',2 N. Y. 553. " McLean v. Walker, 10 John. 1',. 472, 474 ; Garlick v. James, 12 John. E. 146, 149; Brownell V. Hawkins, 4 Barb. 491; Clark v. Henry, 2 T'owon, 324; Parsons v. Over- mire, 22 111. 5S; Campbell v. Parker, 9 Bosw. 322; Kimball v. Hildreth, 8 Allen (Mass.), 107; Gay v. Moss, 34 Cala. 125; Haskins v. Kelly, 1 Eobt. 160, 172; Wood- wortii T. Morris, 5() Barb. 97; Mowry v. Wood, 12 Wis. E. 413. ^ Bright V. Wagle, 3 Dana (Ky.), 252; Houser v. Komp, 3 Pa. St. 2118; Marshall v. Williams, 2 Hayw. (N". C.) 405. See Barrow v. Pa.xton, 5 John. 1!. 258, and Brown v. Bement, 8 John, E. 90, where a bill of sale was held a moii:,'aa;r. Pledges ok Pawns. 161 it is a pledge of immovable property, possessing some of the features of a mortgage ; it is a conveyance of real estate, with a counter letter or stipulation by the grantee to reconvey on payment of the money loaned ; it gives the lender, the grantee, possession of the premises, with the income or fruits arising from tlie property ; out of the income the grantee is to pay the taxes and repairs and interest and to apply the balance on the principal. The grantor's rights remain unimpaired, until they are cut off by a sale under sentence of a coui-t.^ The in- strument resembles one form of the mortgage, formerly in use under the common law, namely, the vivum vadium or living pledge, under which the mortgagee took and held possession until the money loaned was paid out of the rents and profits of the property '' — a form of security now unused, because unsuited to our modern habits.' § 208. The common law does not enforce a contract of hypothecation, distinct from a pledge or mortgage of goods or chattels ; certainly it does not allow, as against creditors and third parties, the creation of secret verbal liens, where the lienholder does not have or retain possession of the property.* The hypothecation of a ship or cargo is permitted upon reasons that do not affect ordinary dealings with 1 Code of Louisiana, Arts. 3102, 3143-3148; Livingston v. Story, 11 Peters, 351, 388. » 2 Black. Comm. 137. Ante, §§ 177, 178, 187. ' In Eoberts v. Sykes, 30 Barb. 173, 179, the court did not feel authorized to pre- sume a pledge to have been made on an agreement that the pledgee was to hold until paid out of the income from the pledge. * Howes V. Ball, 7 Barn. «fe Cress. 481 ; 14 Eng. Com. Law, 218. A agreed to give B, a coachmaker, lOOZ. for a coach, and to pay for the same by four bills of 25Z. each; and that B should have a claim upon the coach until the debt was duly paid. Textekden, C. J. : " The transaction amounted to a sale of the coach, so as to transfer the property. That being so, the question is, whether after such a transfer of the property, the seller can have any valid claim on the property so transferred. Hypothecation is not al- lowed by the law of England, although in some parts of the Continent, not many years ago, it was allowed." The stipulation was therefore treated as a mere license, valid only as between the two parties to the contract. See "Wait v. Greene, 30 X. T. 556, distinguished from cases of conditional sales in Ballard v. Burgett, 40 N. Y. 314, and in Austin v. Dye, 46 N". Y. 500. A lien is a different thing entirely; it is a right to hold or detain property : McCaffrey v. "Wooden, 62 Barb. 316 ; given back on a purchase of goods, in writing, it is a chattel mortgage. Dunning v. Stearns, 9 Barb. 630. A mortgage of a crop yet to be planted, made by the owner of the land, is held valid in some of the States. "Watkins v. Wyatt, 9 Baxter, 250; Headrick v. Braltain, 63 Ind. 438; Eawlings v. Hunt, 90 ST. C. 270; Harris v. Jones, 83 N". C. 317; Minnesota Lin- seed Oil Co. v. Maginnis, 32 Minn. 193; Ambuehl v. Matthews, 41 Minn. 537; Taylor V. Hodges, 105 N". C. 344; Norris v. Hix, 74 Iowa, 524. See Cressey v. Sabre, 17 Hun, 120; McCaffrey v. "Wooden, 65 N". Y. 459. The owner of the land has a right to con- tract for its cultivation, and may in advance fix the title to the produce by agreement. Andrews v. Newcomb, 32 N. Y. 417. 11 162 Law of Bailments. personal property .^ The spirit and even the very letter of our statute law holds every assignment of goods or chattels, by way of security, void as against creditors ; and upholds the mortgage of chattels only when it is properly filed, and is really and fairly given as a security; and never when it is given merely as a cover and for the benefit of the mortgagor.2 The lien having been once created ur good faith by a delivery of the chattels, it will not be defeated by the lienholder's permitting them to be used by the owner for a temporary purpose.^ § 209. Mode of mal-irig a Pledge. Goods and chattels may be pledged by delivering them to a creditor, as collateral security for the payment of the debt due to him. An actual delivery completes the contract."* "When the terms of the agreement are reduced to writing, it is for the court to determhie their legal effect ; they create a pledge when they deliver or give over the property as security for the debt, expressly or impliedly reserving a right to redeem ; ^ and they create -a mortgage when they transfer the general title, subject to a defeasance.^ There is often, as we have noticed, but little real difference between a contract which the law declares a pledge, and one which it adjudges a chattel mortgage ; but this difference is highly important, on account of the difference in the legal rights and remedies arising under them. A verbal pledge, accompanied by a delivery of chattels, is valid ; and the contract is to be proved by verbal testimony, showing the actual transaction.' "Words alone will be sufficient to create a pledge, where the intention is clear and the goods are already in the pledgee's posses- sion ; ' as a gift may be consummated by mere words, where the sub- ject of it is already in the donee's possession.^ The mode of the delivery is not at all important, it may be made directly to the pledgee, or to a 1 Fontaine v. Col. Ins. Co., 9 .John. R. 29. 2 Edgell V. Hart, 9 N. T. (5 Seld.) 213; Ford v. Williams, 24 N". T. 3.59; Southard v. Benner, 72 N. T. 424; Brackett v. Harvey, 91 X. Y. 214. 3 Hall V. Tuttle, 8 Wend. 3S1; Ferguson v. Union Furnace Co., 9 Wend. 345. See Allen V. Spencer, 1 Edm. 317. ■* Stearns v. Marsh, 4 Denio, 227. 5 McLean v. Walker, 10 .John. E. 471, 474; Brownell v. Hawkins, 4 Barb. 491. See Parshall v. Eggart, .J2 Barb. 3(57; S. C. 54 N". T. 18; Bright v. Wagle, 3 Dana (Ky.), 2.52; Heyde v. Xick, 5 Leigh (Va.), 33(;. 6Bunaclengh v. Poolman, 3 Daly, 230; Langdou v. Bush, 9 Wend. SO; these are border cases; they resemble a mortgage more than a pledge; Dunning v. Stearns, 9 Barb. 630. ' Parsons v. Overmire, 22 111. ,5S; Milliken v. Dehon, 27 X. T. 365. So in respect to chattel mortgages. Hall v. Tuttle, 8 Wend. 375; Ferguson v. Union F. Co. 9 Wend. 345. 8 Brown v. Warren, 43 lif. H. 430. ■' Lydia Allen v. Cowan, 23 N. Y. 502. Pledges ui; Pawns. l&i third person to hold for him.^ And in the case of heavy and cumber- some articles, like logs lying in a boom, the delivery may be made with- out moving them.^ The actual custody of the goods need not in all cases be transferred to the pledgee ; it is not always necessary in a sale, in order to transfer the title ; and it is quite evident that a delivery suf- ficient to pass the title under a contract of sale must be sufftcient to create a valid contract of pledge.^ A subsequent delivery, following a contract of sale or pledge, will render it valid/ § 210. The situation of goods or chattels can rarely be such as to prevent the owner from pledging them. The goods being stored in a warehouse, the deliverj"^ may be made by a written transfer, on the warehouseman's agreement to hold the property subject to the order of the transferee ; ^ and when the goods are in transit in the hands of a carrier, the delivery may be made by a transfer of the bill of lading.* The delivery is accomplished in these cases, by transferring to the pledgee the means with the right to take the actual possession of the goods. The owner of goods, by permitting them to be shipped in the name of another person, arms that person with the power to dispose of the goods ; he enables him to take the bill of lading in his own name ; he invests him with written evidence of title to the property ; and the law protects a third party taking them in good faith as a pledge or security for an advance upon them.' The effect is the same where the owner 1 Sumner v. Hamlet, 12 Pick. (Mass.) 76. See Macaiiley v. Hopkins, .35 Hun, 556. 2 Je-wett V. Warren, 12 Mass. 300; PJdder v. McKnight, 13 Jolin. E. 294. s Hankins v. Baker, 46 N. T. 666; Winne v. McDonald, 5 Bosw. 130; 39 N. Y. 233. 4 ParsliaU v. Eggart, 54 IST. T. 18. 5 Pierce v. Gibson, 2 Ind. 408; Gibson v. Stevens, 8 How. U. S. 384; Griswold v. Havens, 25 N. T. 595; Whitney v. Tibbits, 17 Wis. 359; Cartwrigtit v. Wilmerding, 24 K. Y. 521. Goods may be pledged by a mere delivery of a warehouse receipt without indorsement. St. Louis Bank v. Eoss, 9 Mo. App. 399. The delivery and indorse- ment of a warehouse receipt is a symbolical or constructive delivery of the goods. Willets V. Hatch, 132 N. Y. 41, 44. « Edwards on Factors and Brokers, §§ 41, 30; Durbrow v. McDonald, 5 Bosw. 130; 39 N". T. 233 ; 24 N. T. 521 ; Harris v. Birch, 9 Mees. & Wels. 591 ; Brent v. Miller, 81 Ala. 509 ; Douglass v. People' s Bank, 86 Ky. 176 ; Commercial Bank v. Pf eiffer, 108 N". Y. 242 ; First Kat. Bank v. Kelly, 57 :S. Y. 34. The rule is well settled that property or goods shipped by a bill of lading drawn to order may be transferred by delivery of the bill to a third person without any indorsement. Bank of Eochester v. Jones, 4 N. Y. 497, 607; City Bank v. Eome, W. & O. R. E. Co., 44 N. Y. 136; Merchants' Bank v. Union E. E. & Transp. Co., 69 N. Y. 373. ' See 4 Geo. IV. Ch. 83; 6 Geo. IV. Ch. 94; 5 and 6 Vict. Ch. 39; and 3 E. S. of K. Y. 7th ed. 22.J7; Laws of 1830, Chap. 170; also 4 X. Y. Statutes at Large, 461. The first section of the New York statute enacts that, " Every person in whose name any merchandise shall be shipped, shall be deemed the true owner thereof, so far as 104 Law of Bailments. sells goods, and allows the purchaser to ship them in his own name,, before the price is paid.^ Fraud in the shipper's purchase of the goods, sufacient to annul the contract as against him, will not, it seems, defeat the party making advances on the strength of the title ; ^ hut where the bill of ladmg is fabricated or procured on stolen receipts, it amounts to nothing as a security for advances ; it is but an item of evidence to establish a felony.^ § 211. The factor's act, as we have said, specifies three instruments as documentary evidence of title to goods, upon which third parties may safely act in making advances upon the property ; namely, a bill of lading, a custom-house permit, and a warehouse keeper's receipt.* The bill of lading is the carrier's contract ; it states on whose account and risk the goods are shipped, and this statement is evidence that the person so named is the real owner ; as shipper he may transfer the bill, and with it the goods which it represents ; or he can pledge the prop- erty by a simple delivery of the bill, as security for the payment of a draft drawn on the consignee. The carrier delivers on production of the bill of lading, and where the shipper indorses upon it an order to deliver to the consignee on payment of the annexed draft, he can only receive the goods on making the payment thus called for."^ The delivery of the bill, as collateral security on the discount of the draft, is more than a pledge ; it is a transfer of the title to the cargo, in trust to sell it and use the proceeds to pay the draft. Duly issued on a shipment of goods, the bill of lading represents the property ; and a transfer of it has the same legal effect as a transfer of to entitle the consignee to a lien thereon: 1. For any money advanced, or negotiable security given by such consignee, to or for the use of the person in whose name such shipment shall have been made ; and 2. For any money or negotiable security received by the person in whose name such shipment shall have been made, to or for the use of such consignee." See Dows v. Rush, 2S Barb. 15"; S. C. 16 X. T. :)25; 24 X. T. 638; Blossom v. Champion, 28 Barb. 21T; Keyspr v. Harbeck, 3 Duer, .373. The title cannot pass under a felony. Florence Sewing Machine Co. v. Warferd, 1 Sweeny, 433. See Arraount v. M. C. R. E. Co., 6-J X. Y. 111. 1 Winne v. McDonald, 39 X. T. 233; Smith v. Lynes, •") N. Y. 44; Parker v. Baxter, SO N. Y. .586. - An honest purchaser for value from the fraudulent vendee acquires a good title; on. this principle a pledgee for present advances is entitled to protection. Durbrow v. McDonald, 5 Bosw. 130; Williams v. Lilt, 36 N. Y. 319; Barnard v. Campbell, .58 N. Y. 73. See Adams v. Bowerman, 109 N. Y. 23. ^Browerv. Peabody, 13 X. Y. 121; The Schooner Freeman v. Buckingham, 18 How. U. S. 182; Grant v. Norway, 10 Com. B. 665; Saltus v. Everett, 20 Wend. 207; Bassett V. Spofford, 45 X. Y. 387. See Marine Bank of Buffalo v. Fiske, 71 X. Y. 353. * See § 3 of the X. Y. Factors' Act, above cited. '^ Bank of Rochester v. Jones, 4 N. Y. 407; The City Bank v. Rome, W ^.t O. R. K. Co., 44 X. Y. 136; Petitt v. First, etc., Bank, 4 Bush (Ky.), 334; post, § 629. Pledges or Pawns. 165 the property. Hence, when the bill requires the carrier, as it often does, to deliver the goods at the end of the voyage to the bearer, or to the order of the shipper, or to his assigns, it declares on its face the shipper's right of property and control over the goods ; ^ and it is daily used by him in mercantile transactions as a collateral security for ad- vances.^ The sliipper, being the owner, has control of the property ; imtil he parts with the bill of lading, he has the constructive or legal possession, and the right to the immediate actual possession ; and the law allows him to pledge or dispose of the goods, subject only to the right of the carrier to compensation for his services. § 212. The shipper has the power to deal with the goods as his own; he may therefore revoke a consignment after the bill of lading has been signed, or he may draw on the consignee and transfer the bill to secure the payment of the draft, and thus render the consignment con- ditional upon the acceptance or payment of the draft. He may do this, €ven where he is under an agreement to ship the goods to the consignee on account of prior advances ; the agreement does not bind the goods.' When the bill of lading is made payable to order, the party in posses- sion of the bill duly endorsed is entitled to receive the goods ; he is the person entrusted with the evidence of title, and the proper party to enter. the goods at the custom-house.* Holding the title in this manner, he can obtain advances on the goods ; assuming that the bill has been duly transferred to him.^ Not bemg negotiable like a bill of exchange, the bare custody of the bill (of lading) is not conclusive evidence of title ; and, therefore, a misappropriation of the bill by a clerk wUl not deprive the owner of his right of property." The intention of the statute is to protect third persons dealing honestly with the consignee, en- trusted with the title. ^ Making advances in bad faith, or with knowl- edge of the facts, or under circumstances of suspicion, will not entitle iHaillesT. Smith, 1 Bos. & Pull. 563; Nathans v. Giles, 5 Taunt. 588; Allen v. Williams, 12 Pick. 297. 2 Craig v. Sibbert & Jones, 15 Penn. St. 238; Bank of Kochester v. Jones, 4 N. Y. 497; Lanfear v. Blossman, 1 La. Ann. K. 148. * Caynga Co. National Bank v. Daniels, 47 N. Y. 631; Marine Bank of Chicago v. Wright, 46 Barb. 45; Hauterman v. Bock, 1 Daly, 366. * Brace's Warehouse Manual, 17. That property or goods shipped by a bill of lad- ing drawn to order maybe transferred by delivery of the bill to a third person without any indorsement, see Bank of Rochester v. Jones, 4 N. T. 497, 507; City Bank v. Rome, W. & O. R. R. Co., 44 N. Y. 136; Merchants' Bank v. Union R. R. & Transp. Co., 69 Js\ Y. 373. s Lickbarrow v. Mason, 2"T. R. 63; 5 T. R. 367, 683; post, § 629. 6 Gurney v. Behrend, 3 Ellis & Black. 622; Zachrisson v. Aiman, 2 Sand. 68; Com. Bank of Rochester v. Cole, 15 Barb. 506; Covill v. Hill, 4 Denio, 323. ' Porter v. Parks, 49 N. Y. 564. 166 Law of Bailments. the pledgee to hold the goods ; it %vill not enable him to acquire any greater interest in them than the pledgor possessed.^ § 213. The consignee in possession of the bill of lading is presumed to be the owner of the goods ; as a matter of evidence, the legal pre- sumption is that he is the true owner, where the goods are placed at his sole disposal.2 Between the parties this presumption of fact may be overcome by proof, showing the actual title to the property ; as that it was consigned for sale, under instructions binding the consignee as soon as he accepts the goods." The same proof may be given in favor of the consignor's creditors, with a view to reach his interest in the property — an interest that may be attached subject to the consignee's lien for advances.^ § 214. It is to be kept in mind that the factor or commission merchant cannot at common law legally pledge the goods of his principal, without express authority ; that he cannot do so, even for the purpose of raising money to meet his princiiDal's bills of exchange, drawn against a consign- ment of the goods.^ It follows that a factor's pledge of the goods under his control, however made, is ineffectual unless covered by the express terms of the statute." The third section of the iSTew York statute apphes only where the factor or agent is intrusted with the evidence of title, or with the possession of merchandise, for the purpose of sale, or as secu- rity for advances, or both. It does not apply where goods are stored with or left in the possession of the factor, without authority to sell ; or where the goods are committed to his custody for the purpose of shipment or transportation.' 1 Commercial Bank of Eochester v. Cole, 15 Barb. 506; Easton v. Clark, 35 N. T. 225. See Farmers & M. >fat. Bank v. Erie K. Co., 72 N. Y. ISS; Dorrance v. Dean, 106 3Sr. T. 203. 2 Angell on Com. Carriers, § 497; Sweet v. Barney, 23 KT. 335. 3 Winter v. Colt, 7 N. Y. 288; Du Peirat v. Wolfe, 29 N. Y. 436. * Patterson v. Perry, 5 Bosw. 518; Curtis v. Norris, 8 Pick. 280; Black v. Zacherle & Co., 3 How. U. S. 483. = Gill V. Kymer, 5 Moore, 503; Fielding v. Kymer, 2 B. & B. 639; Newsom v. Thorn- ton, 6 East, 17; Guichard v. Morgan, 4 Moore, 36; Martine v. Coles, 1 M. & S. 140; McCombie v. Davies, 7 East, 5; 3 Smith, 3. See Boyson v. Coles, 6 M. & S. 14; First Nat. Bank of Toledo v. Shaw, 64 N. Y. 283, 298. 6 Hatfield v. Phillips,12 C. & F. 343; 14 M. & W. 665; Phillips v. Huth, C M. &W. 572. ■ Conito V. Mosquera, 2 Bosw. 402, 429, 436; Wilson v. Nason, 4 Bosw. 155; Covia V. Hill, 6 N Y. 374; Cook v. Adams, 1 Bosw. 497; Danbury v. Britton, 5 Scott, 665. See Mooros v. Kidder, 34 Hun, 534; S. C. 106 N. Y. 32. The English Act of (i Geo. IV. Ch. 94, as construed by the decisions, only rendered pledges effectual when made on the specific document of title entrusted to the factor by the owner. The later Act of 5 and Vict. Ch. 39, is of broader scope ; but does not cover pledges for antecedent debts, no actual advance being made at the time. Macnee v. Gorst, 4 L. K. Eq. 351; 15 W. E. 1197. The New York Factors' Act, with some modifications, is a reproduction of that of 6 George IV. First Nat. Bank of Toledo v. Shaw, 64 X. Y. 2s !. l".!S. Pledges oe Pawns. 167 § 215. As soon as the consignee receives the goods, the bill of lading ceases to represent them ; it has accomplished the purpose for which it was given ; and it can no longer be transferred as evidence of the title to the goods. ^ On their arrival from abroad, the consignee holding the bill of lading enters them at the custom-house, and procures from the collector and naval officer of the port a permit to land the goods, which is given on receipt of security for or on payment of the duties. On pre- senting 'this permit to the inspector, the goods are landed and delivered. A delivery order indorsed on the permit will give to the holder, exclu- sively, the means and power of obtaining possession of the property.^ It may, therefore, be assumed that the consignee may pledge the goods for advances by a transfer of the custom-house permit, with an 'order for their delivery to the transferee.' § 216. When the duties are not paid, the goods pass into a bonded warehouse, designated by the consignee ; and the warehouseman gives a receipt for them, stating on whose account they are so received in bond. This receipt now becomes evidence of the title ; the goods are held as security for the payment of the duties ; the actual custody of the property being separated from the legal possession. In this situa- tion the holder of the receipt, the consignee or factor for sale, may pledge the goods for advances or sell them, by a transfer with an order indorsed upon the receipt for a delivery of the goods, accompanied by a written authority to make the withdrawal entry at the custom-house. Thus armed, the transferee has the exclusive means of reducing the goods into his actual possession, on payment of the duties. The legal possession accompanies the title, and passes to the transferee.* The money or securities advanced by the pledgee must be given on the faith of the title ; but it is not essential that the pledge should be created in specific form, at the very time the advance is made ; it may be perfected afterwards ; or the pledge may be first made, and the money or security afterwards given.^ § 217. Goods or grain in a private warehouse, for which the owner 1 Bonlto V. Mosquera, 2 Bosw. 401, 440; Hatfield v. Phillips, and Phillips v. Huth, supra. ^ Bonlto V. Mosquera, 2 Bosw. 441, and Bruce' s Warehouse Manual. , ' The force of the permit is soon spent ; it is a voucher for the duties paid ; it author- izes a landing of the goods; and it specifies the importer or consignee by name. « Mottram v. Heyer, 5 Denio, 629; Waldron v. Eomaine, 22 N. T. 368; Dimham v. Maun, 8 N. T. 508; Cartwright v. Wilmerding, 24 N. T. 521; Zachrisson v. Poppe, 3 Bosw. 171. 5 Jennings v. Merrill, 20 Wend. 9; Winne v. McDonald, 39 N. T. 233; Cartwright V. Wilmerding, 24 N. T. 521, 533. See Voorhis v. Olmstead, 66 N. Y. 113; Knights V. Wlffin, L. E. 5 Q. B. 660; Continental N. Bk. v. Nat. Bk., 50 N. T. 575. iijg ' Law of Bailments. holds a receipt, may be delivered in pledge by a transfer, with an order for the property ; the receipt is written evidence of title within the meaning of the statute ; and a valid transfer of the goods, accompanied with an order on the warehouseman for their delivery, is effectual to render valid a contract of pledge. The delivery is sufacient. The trans- feree takes the title in trust, and the possession follows the title ; cer- tainly, where the transaction covers a specific parcel of goods.i In what manner is this transfer to be made ? As a bill of lading 'may be transferred, with the goods covered by it, by a simple delivery of it in pledge, there does not seem to be any good reason to prevent a vaUd transfer of the warehouse receipt in the same manner. The form of the receipt is often such as to indicate an intention that it shall be so trans- ferred.'' And though not drawn so as to caU for dehvery to the bearer, it is at least as transferable as any chose in action ; ' which may be transferred without any form of writing; as an equitable mortgage may be created by a deposit of title deeds ; » and as a gift of a security may be perfected without a written transfer.^ In some of our business centers the custom is to receive grain into large warehouses or elevators, unloading each car or vessel into a com- mon mass, taking care to keep each grade of the grain by itself. For each parcel received, the owners of the elevator give a receipt, specify- ing the number of bushels, and the grade, and on whose account the grain is so received, and that it is " subject to their order hereon." On a sale or pledge of the parcel, the holder of the receipt indorses upon it an order for the delivery ; thus placing the grain mider the control of the transferee." 1 Cartwright v. Wilmerding, 24 N. T. .521, ."jSfi; Waldron v. Komaine, 22 N. Y. .368; Mottram v. Ileyer, '> Denio, 629; Pierce v. Gibson, 2 Ind. 408. 2 Rice V. Cutler, 17 Wis. 051; WMtney v. Tibbitts, 17 Wis. 3-JU. There is no dis- tinction in this respect between a warehouse receipt and a bill of lading. The indorse- ment and delivery of a warehouse receipt is a symbolical or constructive delivery of the goods to the transferee and vests the title to the goods in him. Willets v. Hatch, 132 N. T. 41, 44. 8 Petitt V. First, etc., Bank, 4 Bush (Ky.), ZU; City Bank v. Rome, W. & O. R. K. Co., 44 N. T. 136; Luckey v. Gannon, 1 Sweeny, 12. * Daw V. Terrell, 3:) Beav. 218; Keyes v. Williams, 3 Y. * C. 5.";; Williams v. Evans, 23 Beav. 229. ^ Sessions v. Moseley, 4 Cush. 87; Bates v. Kempton, 7 Gray, .'!8:;; Brown v. Brown, 18 Conn. 310; Westerlo v. De Witt, :jij N. Y. 340. ^ Whitney v. Tibbitts, supra; Russell v. Carrington, 42 X. Y. lis. lu this case 400 bushels of corn in an elevator were sold and paid for, and an order given on the elevator for the same ; held that the title passed, and that the separation of the par- cel from the common mass, undistinguishable in quality or value, is not necessary to pass the title when the intention to do so is otherwise clearly manifested. The real intent of the transaction is to be carried into effect. Kimberly v. Patchin, 19 N". T. Pledges ok Pawns. 169 § 218. The third section of our factors' act declares that the factor or agent intrusted tvith the possession of any merchandise for the purpose of sale shall be deemed the true owner, so as to give validity to his contract for the sale or disposition of the goods for money advanced or securities given on the faith thereof. In terms it gives the same effect to the possession of the goods as it does to the possession of document- ary or written evidence of the title. Possession, with authority to sell, enables the agent to procure advances upon the goods.^ Possession without, or after the authority has been withdrawn, does not enable him to pledge the goods.'' And he cannot, without express authority, pledge them as security for an antecedent debt. Acting without such authority, he cannot rightfully pledge the property in any case for his own benefit. § 219. Shares of stock in a corporation are now, and have been for many years, habitually pledged as collateral security for money loaned. The pledge is made by a direct transfer of the scrip, in writing, with an authority to effect a transfer in due form on the books of the cor- poration ; and in his note for the sum loaned, the borrower further authorizes the pledgee to sell the stock. The effect of the transaction is not a mortgage, but a pledge of the stock to secure the prompt payment of the money borrowed. On account of its incorporeal nature, prop- erty in stocks cannot be otherwise delivered. A delivery of the scrip alone is not considered sufficient, because it does not of itself enable the pledgee to sell the stock and apply the proceeds to pay the debt ; ' 330. See Perkins v. Dacon, 13 Mich. 81; 7 N. T. 357; 9 Ad. & Ellis, 895. When the delivery is required to satisfy the statute of frauds, on a sale, the order should be ac- cepted or assented to by the warehousemen. Dixon v. Buck, 42 Barb. 70; Potter v. Washburn, 13 Vt. 538; Barrows v. Harrison, 12 Iowa, 588; Biddle v. Bend, 6 Best & ■Smith, 225; Gibson v. Stevens, 8 How. TJ. S. 384. 1 Pegram v. Carson, 10 Bosw. 505. But see Bonito v. Mosquera, 2 Bosw. 401; Mer- chants' Bank v. Livingston, 74 N. T. 223, 228. 2 Nickerson v. Darrow, 5 Allen, 419; Fuentes v. Montis, 16 W. K. 900; 3 L. E. C. P. 268; 37 L. J. C. P. 137; 18 L. T. N. S. 21. Affirmed on appeal, 17 W. E. 203; 38 L. J. C. P. 95; 19 L. J. N. S. 364; 4 L. E. C. P. 93. 3 Allen V. Dykers, 3 Hill, 593; S. C. 7 Hill, 497; Wilson v. Little, 2 N. Y. (2 Comst.) 443. The form of the note given by the borrower appears in both of these cases ; it is very nearly the same now in use. In Allen v. Dykers the stock was transferred on the books of the corporation when the note was given; this is not now the custom. In Wilson V. Little the transfer was also made on the books of the company on the day the loan was made. In the note now used the maker gives the pledgee authority to sell at the Board of Brokers, N. Y. or at public or private sale. In support of the doctrine stated in the text, see also, Nisbet v. Macon Bank & Trust Co., 4 Woods. C. Ct. 464. The possession of a blank transfer of a certificate of stock, with irrevocable power of attorney to transfer signed Ijy the person who appears by the certificate to be the 170 Law of Bailments. and yet it is quite possible to pledge the stock, without giving to llic pledgee every facility to dispose of it by a swift sale.^ A contract of pledge also arises where a broker receives from a customer an advance of money as a margin, and agrees to purchase and hold stocks for him on speculation ; the broker to hold the stocks as a security for the pur- chase money paid by him beyond the margin advanced. The risk of loss is assumed by the customer ; the purchase is made on his behalf, and the agent holds the title to the stock as security. In substance, the transaction creates the legal relation of pledgor and pledgee between the parties. The general title to the stocks is in the customer on whose account the purchase is made ; and the broker is therefore bound to hold the same subject to his principal's right of property, under the contract.- Shares of stock in a bank or banking association may also become pledged to the corporation for the debts and liabilties of the shareholder. Such a pledge arises where the charter or the articles of association provide that the shares of its stock are to be transferred on its books, and that they shall not be transferable unless the shareholder shall first discharge all debts due by him to the bank. The effect of the pro- vision is to pledge each shareholder's stock for any debt or liability incurred by him to the corporate body ; and hence every purchaser of the stock takes it subject to this lien.' A by-law of the association is not effectual to create the lien ; clearly not where under the statute the articles of association are to regulate the transfer of the stock.' Under a direct pledge of stock, the owner making the pledge retains the right to vote upon it in the election of directors of the corporation ; owner, confers upon the holder the power to pledge or sell the stock, as owner (Mc- Neil V. Tenth Nat. Bank, 46 N. Y. 325), but not as agent for the owner. Merchants' Bank v. Livingston, 74 N. T. 223. 1 Com. Bank of Buffalo v. Kortright, 22 Wend. 348; Ex parte Willcocks, 7 Cowen, 402; Matter of Barker, 6 Wend. 809. ^Markham v. Jaudon, 41 N. Y. 23-5; Horton v. Morgan, 19 N. Y. 170; Lawrence v. Maxwell, 53 N. Y. 19; Baker v. Drake, 53 N. Y. 211; S. C. 66 N. Y. 518; G-illett v. ^Vhiting, 120 X. Y. 402; Gouman v. Smith, 81 N. Y. 25. i'Leggett V. Bank of Sing Sing, 24 X. Y. 283; Grant v. Mechanics' Bank of Phila., 11 Serg. & Eawle, 143; Union Bank of Georgetown v. Laird, 2 Wheat. 390; Bank of TJtica V. Smallcy, 2 Cowen, 770; McCready v. Ramsey, 6 Duer, 574. See Driscoll v. West Bradh.'y & C. M. fJo., 59 N. Y. 96. A pledgee of a certificate of stock which has printed thereon a by-law that no transfer of the stock shall be made while the owner is indebted to the corporation takes it with notice. State Savings Assoc, v. Nixon- Jones Printing Co., 25 Mo. App. 642. See Laws of 1890, Chap. 504, § 26; Laws of 1892, Chap. 088, § 26. *Bank of Attica v. Manufacturers' & Traders' Bank, 20 N. Y. 501; 34 N. Y. 30, 80; 13 N. Y. 599; Cole v. Ryan, 52 Barb. 168, 172; Rosenback v. Salt Springs National Bank, 53 Barb. 495, 502. Pledges ok Pawns. 171 a right so evident tliat no question can arise in reference to it, where the stock remains registered in the name of the pledgor.^ The contract of pledge is entirely consistent with the owner's rights as a stockholder ; until the pledge is rendered available by a foreclosure, he remains a mem- ber of the corporate body, interested in its management.^ Appearing as a stockholder on the books of the corporation, the inspectors are not at liberty to inquire whether the stock has been hypothecated. ^ The inspect- ors may require each member offering to vote to take and subscribe an oath to the effect that he has not sold or otherwise disposed of his interest in or title to any shares of stock in respect to which he offers to vote, and that all such shares are still owned by him.* Formerly no person could vote at an election of directors of a moneyed corporation on any shares of stock which had been hypothecated or pledged as collateral security.* But the statute containing this prohibition was repealed by the General Corporation Law. § 220. A direct transfer of the title to a security or chose in action is perfectly consistent with a contract of pledge ; and will be so consid- ered where the whole transaction shows that the transfer was intended as a security, and does not amount to a mortgage or a sale.' In many cases it is quite important that the holder should be invested with the title ; and in some cases it is essential that he should hold the title in order to reap the benefits of the security ; e. g.^ where a policy of insur- ance against loss by fire is assigned as collateral security for the pay- ment of a sum loaned on bond and mortgage, the assignment of the policy is necssary to give the mortgagee the protection of the policy ; and the custom is for the holder of the bond and mortgage either to take a formal assignment of the policy, with the consent of the insurer, or to have an entry made upon the policy making the loss, if any shall happen, payable directly to the holder of the mortgage.' 1 JJe ■parte Willcocks, 7 Cowen, 402, 410; Matter of Jacob Barker, 6 Wend. 509; Laws of 1892, Chap. 687, § 20. 2 Merchants' Bank v. Cook, 4 Pick. (Mass.) K. 405; 44 Md. 349. The qualifications of members of a corporation to vote are now declared by the General Corporation Law, See Chap. 35, § 20, General Laws; Laws of 1892, Chap. 687, § 20. « Matter of Cecil, 36 How. Pr. 477. *Laws of 1892, Chap. 687, § 22. 5 2 R. S. (7th ed.) 1869, §37. 'McLean v. Walker, 10 John. K. 471; Campbell v. Parker, 9 Bosw. 322; Dewey v. Bowman, 8 Cala. 145. 'The mortgagee and his assignee have an insurable interest in the premises covered by the mortgage. See Shearman v. Niagara Fire Ins. Co., 46 N. T. 526; Grosvenor V. Atlantic Fire Ins. Co., 17 N. T. 391; Buffalo Steam Engine Works v. Sun Mutual Ins. Co., 17 N. Y. 401. 172 Law of Bailments. § 221. There is nothing to prevent the owner from pledging an ex- isting reversionary interest in chattels or securities ; e. g., a consignee who procures advances on a consignment, by depositing the bUl of lad- ing with the party making the advance, does not thereby preclude him- self from making a further pledge of the same goods ; the first pledge being for an amount which does not exhaust their value. The second pledge is rendered effectual by a contract pledging the goods, with an order on the first pledgee for the balance after paying the amount due him ; his assent to the order will be sufficient.^ In like manner, where stocks are held in pledge by a bank for a loan of money, there is noth- ing to prevent the owner from making a further pledge of them to the bank for additional advances, by a verbal contract. The existing situ- ation dispenses with the necessity of any formal transfer.- A bond and mortgage may be transferred, as a collateral security, without making a formal written assignment of them ; that is to say, by delivering them and receiving advances upon them. After that a written assignment of the securities to a third party will convey the title subject to the advances which have been made upon them.' A delivery or transfer of the mortgage sejjarate from the bond amounts to nothing ; since the mortgage is only a collateral to the bond debt it is given to secure.* \ sale of the pledge, a chose in action, to a bona fide purchaser for value, is so far effectual, that the- pledgor must tender the amount of the original debt to the purchaser.^ § 222. Negotiable notes, bills of exchange, and bonds issued by gov- ernment or by private corporations in a negotiable form, are usually pledged as collateral security, by a delivery of the mstrument so in- dorsed, where that is necessary, as to vest the title in the pledgee. And the circumstance that the title is in form transferred to the pledgee, does not materially affect the contract of pledge ; the pledgee takes the title in trust, to sell the bonds, they being usually bought and sold like stocks, and to collect the negotiable notes or bills when they become due, and apply the proceeds on the debt to secure which they were given.' The contract of pledge may be valid and effectual where the iPortalis v. Telley, 5 L. r.. Eq. 140; 37 L. J. Chanc. 139; 16 W. R. .J03; 17 L. T. N. S. 344. 2 Van Blarcom v. The Broadway Bank, 37 N. T. 540. See Brown v. AYarren, 43 N. H. 430; and also, Sanders v. Davis, 13 B. Mon. (Ky.) 432. 3 A mortgage may be assigned by a mere delivery. Runyon v. Mersereau, 11 John. R. 534; Sweet v. Van Wyck, 3 Barb. Ch. 647; Haskins v. Kelly, 1 Eobt. 160, 171, and cases there cited. * Merritt v. Bartholick, 36 N. Y. 44. 6 Tally V. Freedman's Savings & Trust Co., 93 U. S. 321. " Wheeler v. Newbold, 16 N. T. 392. Pledges oe Pawns. ITS notes or bills are not properly indorsed to the pledgee ; the paper be- ing delivered as a security.^ The trustee has the right to collect the amount due on the security, in order that he may properly execute the trust.^ The bonds of a state or of a corporation, issued under the authority of law and made payable to bearer, are negotiable in such a sense that the purchaser takes the title by delivery with the rights of a bona jid& holder.^ He is entitled to hold them, where he purchases them, or makes advances upon them in good faith, and becomes the actual holder of them.* The same rule must apply where bonds or stocks or coupons are left and issued in such a form that they will pass from hand to hand by delivery ; on the other hand, where they do not pass as negotiable paper, the pledgee will only acquire the interest of the pledgor in the security.^ § 223. Where a pledge is fairly made, the pledgee does not lose his lien by permitting the owner to take and use the property for a special purpose ; as where the captaiu of a ship pledged his chronometer and was permitted to use it for a voyage ; " or where the purchaser of per- sonal property delivers it as security to a person who becomes his surety for the purchase money, and he permits the purchaser to use it tempo- 1 Nelson v. Wellington, 5 Bosw. 178, 187; Nelson v. Eaton, 26 N. T. 410. As to effect of pledge in due form, see ante, §§ 196, 197; Marine Bank v. Vail, 6 Bosw. 421; Brain- ard V. N. Y. & H. K. E. Co., 25 N. Y. 496. ^Flagg V. Hunger, 9 N. Y. 483, 492. » Assumed in State of Illinois v. Delafield, 8 Paige, 527; S. C. 2 Hill, 159, 177; Fisher v. The Morris Canal & Banking Co., 3 Amer. Law Reg. 423; Bank of Rome v. Village of Rome, 19 N. Y. 20; Evertson v. Nat. Bank, 66 N. T. 14. It is the general rule that the honds of railroad, manufacturing and other like corporations, payable to hearer, issued for the.purpose of securing loans of money, are deemed negotiable, and that the coupons attached thereto partake of the same character. But to give nego- tiability to such paper it must provide for the unconditional payment to a person, or order, or bearer, of a certain sum of money, at a time capable of exact ascertainment. McClelland v. Norfolk Southern E. R. Co., 110 N. Y. 469. A purchaser for value of negotiable bonds will be protected unless the circumstances are such that an inference could be fairly and legitimately drawn that the purchase was made with notice of a defe:;tive title in the seller or in bad faith. Dutchess County Mut. Ins. Co. v. Hach- field, 78 N. Y. 226. There can be no hona fide holder of town bonds, within the meaning of the law applicable to negotiable paper, where they have been issued with- out authority, (Cagwin v. Town of Hancock, S4 N. Y. 532), unless the legislature has so declared. Alvord v. Syracuse Savings Bank, 98 N. Y. 599. * Birdsall v. Russell, 29 N. Y. 220. He cannot take as hona Ude holder, where he takes with notice. Starin v. Town of Genoa, 23 N. Y. 439. ^Culver v. Benedict, 13 Gray, 7; Hodges v. Shuler, 24 Barb. 68; S. C. 22 N. Y. 114; Gorgier v. Mieville, 3 B. & C. 45 ; Lang v. Smyth, 7 Bing. 284. fi Reeves v. Capper, 5 Bing. N. C. 136; 47 111. 53. 174 Law of Bailments. rarily.^ The pledgee must retain the possession ; he need not retain the actual custody of the property, in order to preserve his lien. E. g., where the pledgee of a bond delivers it to the pledgor to get and return stock in exchange for it, he does not part ^'ith his title or possession ; he may therefore maintain the action of trover against the pledgor for the bond ; ^ he takes the property as an agent or special bailee, subject to the order of the pledgee, and in subordination to the special prop- erty.^ The general rule is, that the possession must be taken and retained in order to create and continue the pledge. The rule is properly en- forced with some strictness in favor of creditors and third parties ; the same reasons require the possession to uphold the lien, which apply Avhere a bailee holds a hen on chattels for \i'ork and services.^ § 224. Relation of Ph-ilfjeto Oriijinal Contract. A contract of pledge is like a contract of suretyship ; it bears much the same relation to the original debt. The original debt is the basis of the new contract ; it is the consideration for the contract of pledge.'^ The original debt being illegal, the law will not enforce a contract of suretyship to secure its 1 Ferguson v. Union Furnace Co., 9 Wend. 345; treated as a mortgage. 2 Hays T. Riddle, 1 Sand. 24S. 3 White V. Piatt, 5 Denio, 269; Way v. Davidson, 12 Gray (Mass.), 465; Coleman v. Shelton, 2 McCord (S. C), Ch. 123; Cooper v. Ray, 47 111. 53; Hutton v. Arnett, 51 111. 98; Thayer v. Dwight, 104 Mass, 2.-)4. * Walker v. Staples, 5 Allen (Mass.), 34. Bill of sale given of a carryall and chaise as a security, held a pledge ; and being given back by the pledgee to the pledgor to let on hire for his own advantage, with care, it was held that the pledgee thereby lost his lien. Kimball v. Hildreth, 8 Allen (JIass.), 107. A bill of sale of a watch, amounting to a pledge of it ; pledgee redelivered the watch, and no explanation being given, the court held this a waiver of the lien: that the pledgee by relinquishing the possession waives or loses his lien. Beeman v. Lawton, 37 Maine, 543 ; the possession must be taken and retained in order to create and continue a pledge ; Russell v. Fillmore, 15 Vt. 130, 135. Treadwell v. Davis, 34 Cal. 601 ; Parshall v. Eggart, 52 Barb. 307 ; agreed upon, it may be acquired afterwards ; S. C. .')4 N". T. 18. See Macauley v. Hopldns, 35 Hun, 550. Where the pledge is immediately returned to the pledgor, and he is per- mitted to use the same (horse) as his own property, an attaching creditor will hold the property. Barrett v. Cole, 4 Jones Law (X. C), 40. And a 6o)ici ^Repurchaser from the pledgor in possession will hold the property. Smith v. Sasser, 4 Jones Law (X. C), 43. Held also in Bodenhamer v. Newsom, 5 Jones Law (S. C.), that the pledgee loses his lien by giving up the property to the pledgor for a special purpose. But a pledgee does not lose his lien where the pledgor has obtained the possession of the thing pledged by fraud or false pretenses. Bruley v. Rose, 57 Iowa, 051; Ea^lon v. Hodges, 18 Fed. Rep. 077. The fact that the pledgor assists the jiledgee in taking care of the pledged property after its delivery does not necessarily affect the pledgee's rights as against the pledgor's creditors. Hilliker v. Kuhn, 71 Cal. 214. ^ Jewett V. Warren, 12 Mass. 300. Pledges oe Pawns. 175 payment ; ^ and for the same reason it cannot enforce a contract of pledge made to secure an illegal debt. In other words, the law must leave the parties where it finds them ; since it cannot give to either party an aflr- mative rehef where the pledge is made at the time and enters into the original, the illegal contract.^ The party paying or advancing money or property under an illegal contract is not allowed to recover it back ; that is, the law does not interfere to compel a restoration.* § 225. The law does not aid a party in the execution of an illegal contract, and it does not uphold a collateral agreement designed to in- sure its performance. On this account the assignment of an existing valid bond and mortgage, made at the same time and to secure the ful- fillment of an illegal contract, does not transfer the title ; and the assignee will not be permitted to reap the advantages of the collateral security by a foreclosure.* For the same reason, a new and subsequent contract, which stipulates for the performance of the illegal agreement, is equally illegal and void ; it is void when it is based upon or seeks to fulfill any part of the original contract ; ^ and neither party can obtain the aid of a court in its enforcement. The law cannot show any more favor to the auxiliary than it does to the principal contract ; and it cannot suffer itself to be evaded or subverted in any manner." § 226. When a contract is not illegal in substance, it is not treated as illegal and corrupt simply because it provides for a prohibited mode of payment, or embraces an illegal stipulation in favor of one party, in no way beneficial to the other. E. g., a deposit of money in a bank creates a, legal contract ; and though the bank credit the amount in a pass-book, illegally making it payable at a future day, the depositor may recover back the money.' So where a bank of this State borrows money of a 1 Swift V. Beers, 3 Denio, 70; Tyler v. Yates, 3 Barb. 222. 2 King V. Green, 6 Allen (Mass.), 139. Held in respect to a watch given in pledge for the hire of a horse for a pleasure drive on a Sunday. The debt is illegal and not collectible. Way v. Foster, 1 Allen, 408. 3 Ball V. Gilbert, 12 Met. 397; Sampson v. Shaw, Exr. 101 Mass. 143. In this case the coiirt held a contract to create a corner in a certain stock illegal, and that a party to the contract, whose funds had been used in the transaction with his assent, could not recover them back. *De Witt V. Brisbane, 16 N. T. 508; Schroeppel v. Corning, 5 Denio, 230; Johnson V. Bush, 3 Barb. Ch. 207; assumed in Kellogg v. Adams, 39 N". T. 28. 5 Gray v. Hook, 4 X. Y. 449. ^Leavitt v. Palmer, 3 N. Y. 19; discussed and distinguished in Curtis v. Leavitt, 15 N". Y. 9, 101, 231; 17 jST. Y. 521; Sackett's Harbor Bank v. Codd, 18 N. Y. 240. The first of these cases involve the character of our banking associations and the effect of our restraining laws ; they do not depart from the familiar rules stated in the text. ^ White V. Franklin Bank, 22 Pick. 1.":. 176 Law of Bailments. foreign company and gives notes therefor, illegal by our law because payable on time, and gives a pledge of stocks to secure the payment, the lender, innocent of any intent to evade the law, may hold the pledge.^ So where a sale of stocks, legal in itself, is made to a banking associa- tion, and the seller receives therefor notes illegal simply because pay- able on time, he may recover the value of the; stocks ; not being in pari delicto, he may recover on an implied undertaking.^ The mode of pay- ment is not of the essence of the contract ; it is more like a collateral stipulation — a dead limb to be pruned away that the tree may live. § 227. Money paid and securities given under extortionate contracts may be recovered back, or the contract held void, as the case may re- quire ; ° including in this class of contracts pledges illegally taken by a public officer under color of his office.'' But when the parties meet on equal terms, we assume it as quite clear on general principles, that a party pledging goods as security for the performance of an illegal con- tract, the pledge being made at the time and entering into the terms of the contract, will not be assisted to recover back the pledge. The posi- tion of the defendant is one of vantage, only because the law wiU not give its aid to either party .^ When the pledge is made subsequently to secure an illegal debt, it is without consideration; the pledgee can hardly obtain the aid of law to defend his possession of the property ; and it admits of some debate whether the pledgor should be allowed to recover back the things pledged, without tendering the amount which is equitably and justly dvie." No action at law being required to con- vert the pledge into a payment, it would seem to follow that it should be treated as a payment ; especially where the principal debt is justly due, and vitiated only on grounds of prudential policy.' Pledges given to secure the payment of a debt for money borrowed, on a contract illegal because usurious, maybe recovered back under the statute of this State in an action brought by the borrower, without ten- dering the amount actually due. A purchaser or assignee of the pledge 1 Curtis Y. Leavitt, i:> N. Y. 9. 2Tracyv. Talmage, MN. Y. l(;2-i!18, and the cases there reviewed by Judges Sklden and Comstock; Oneida Bank v. Ontario Bank, 21 N. Y. 490; City Bank of N. H. v. Perkins, 29 N. T. 554. ^Osborn v. liobbins, :!i; X. Y. .305. < Richardson v. Craudall, .30 How. Pr. 134; 47 Barb. 335; S. C. 48 X. Y. 348. 5 Taylor V. Chester, Law Eep. 4 (,)ueen's Bench, 309; Causey v. Yates, 8 Humph. (Tenn.), 605; King v. Green, Allen (Mass.), 140. " King V. Green, supra; Jaques v. Golightly, 2 W. Bl. 1073; Smith v. Bromley, Doug. 670, in note ; Scarfe v. Morgan, 4 M. & W. 281. " Fanning v. Dunham, 5 John. Ch. E. 122. Equity gives relief upon equitable terms. Williams v. Fitzhugh, 37 N". Y . 444. Pledges oe Pawns. 177 is not entitled to the same relief, where the pledge is made at the time of the loan.i Independent of the statute, equity will not decree a re- turn of the security unless the borrower returns what he has received.^ Equity does not enforce a forfeiture : it grants relief in such cases only on equitable terms.'' In an action at law, the securities given on a usurious contract may in this State be recovered back under the statute ; the action of trover may be maintained for them.^ iScliermerliom V. Tallman, 14 N. Y. 93, 126, 131; Post v. President of Bank of Utica, "7 Hill, 391; Eexford v. Widger, 2 N. Y. 131; Hartley v. Harrison, 24 N. Y. 170; Beecher v. Ackerman, 1 Robt. 30; Code of Civil Procedure, § 1911; Alden v. Diossy, 16 Hun, 311; Smith v. Cross, 16 Hun, 487; Wheelock v. Lee, 64 N. Y. 242; Dickson v. Valentine, 57 N. Y. Supr. Ct. 128. A devisee of lauds, subject to a mort- gage executed by his testator to secure a usurious loan, cannot maintain an action to cancel the mortgage without first paying or offering to pay the sum actually loaned. Buckingham v. Corning, 91 N. Y. 525. 2 Fanning v. Dunham, 5 John. Ch. 122; Whittemore v. Francis, 8 Price E. 616; Scott V. Nesbit, 2 Cox's C. C. 183. The security is void; the lender cannot recover on it. Hammond v. Hopping, 13 Wend. 505, 511. 8 Livingston v. Harris, 3 Paige Ch. E. 528; Jackson v. Shawl, 29 Cal. 267. * Schroeppel v. Corning, 6 N. Y. 107; Couslaud v. Davis, 4 Bosw. 619; Braynard v. Hoppock, 7 Bosw. 151 ; S. C. 32 N. Y. 571. Our statutes against usury remain now substantially as they stood before the revision of 1830; the changes proposed by the revisors, which would have created a consistent and harmonious system, were nearly all of them rejected by the legislature. The eighth section of the present act was among the amendments then proposed and adopted; and this section, it is held, does not abrogate the previously established principle, that on the filing of a bill of dis- covery, alleging usury, the complainant must pay or offer to pay the principal, or the sum actually lent. The latter clause in this same section, forbidding a court of equity to require or compel payment on deposit of the principal sum as a condition of grant- ing relief, applies only to cases where the complainant, although he can prove the usmy without resort to the oath of the lender, has no opportunity of setting up the defense in consequence of the nature of the securities given by him; as for in- stance, a bond and warrant to confess a judgment, or a mortgage with a power to foreclose under the statute. As a general rule, where the complainant has no legal evidence of the usury, and seeks to compel the defendant to admit or disclose the fact, courts of equity will not compel an answer upon oath, and thus force the defendant to give testimony against himself, where his answer may subject him to a criminal pros- ecution, to a forfeiture or a penalty. The plaintiff, in such a, case, is boimd to waive the forfeiture and pay the amount actually loaned, not only because that is just and equitable, but in order to guard against the possibility of the defendant's answer being made the means of subjecting him to a loss in the nature of a forfeiture. Livingston v. Harris, 3 Paige Ch. R. 528; .10 Wend. 588; 3 R. S. 73, 5th ed. ; Eexford V. Widger, 2 N. Y. 131; Schroeppel v. Corning, 2 N. Y. 132; Williams v. Fitzhugh, 37 N. Y. 451; Cope v. AVheeler, 41 ]Sr. Y. 303. See Gerwig v. Sitterly, 56 N. Y. 214. In Pennsylvania the lawful rate of interest for the loan or use of money in all cases, when no express contract is made for a less rate, is six per cent, per annum. Act of May 28, 1858, 1 P. L. 622. When a rate of interest for the loan or use of money ex- ceeding that established by law is reserved or contracted for, the borrower or debtor 12 178 Law op Bailments. § 228. From motives of public policy several classes of contracts are pronounced void by the statute of frauds, unless made in writing. In one sense these contracts are illegal, unless they are made in writing : illegal in the sense that they do not conform to the terms of the statute ; not corrupt and illegal because they work a violation of the law. And though such a contract cannot be enforced, the party advancing money on it is not allowed to recover it back so long as the other party is ready and willing to fulfill it on his part ; and he /.s allowed to recover back the money so paid where the other party refuses to fulfill the contract.^ Neither is allowed to maintain an action in affirmance of the contract.'' And the party giving a pledge for the performance of the cannot be required to pay the creditors the excess over the legal rate, and it is lawful for the borrower or debtor, at his option, to retain and deduct the excess from the amount of the debt ; and in all cases when the borrower or debtor voluntarily pays the whole debt or sum loaned, together with interest exceeding the lawful rate, no action to recover back the excess can be sustained unless the same is commenced within six months from and after the payment. Excess of interest over six per cent, is the money of the borrower, which, when received by the lender, he cannot retain, but holds for the use of the borrower, and assumpsit will lie for it. 03 Pa. 108. As soon as the borrower' s right to recover excess of interest accrues, he stands in the relation of creditor to the lender for money had and received to his use. Case is a proper remedy to recover excessive interest. 4s Pa. 130. The general rule as to the measure of damages in an action of trover (CiO Pa. 408) undoubtedly is well settled to be the value of the goods at the time of the conversion, to which maybe added interest to the time of the trial, unless there may be some circumstances of oppression in the case, when the jury may give more. Whenever there is a duty or obligation devolved upon a defendant to deliver stocks or .securities at a particular time, and that duty or obli- gation has not been fulfilled, then the plaintiff is entitled to recover the highest price in the market, between that time and the time of the trial. The grounds of this ex- ception are that such securities are limited in quantity, and cannot always be obtained at any price, and are of a very fluctuating value. 4 Watts, 142. The pledgee has a right to avail himself of the securities deposited with him by collecting the money on choses in action, when due, and applying it to the payment of his debts ; and it is usual for the creditor, when goods or stocks are deposited as collateral security, if the debt is not paid when due, to avail himself of these deposits by sale ; and when a prom- issory note is delivered to a creditor as collateral security, and is not paid when due, he may sue upon it: and it is in the interest of the original debtor that he should do so, since otherwise an available fund might be lost. A creditor is bound to account with his debtor for the proceeds of the security, and cannot have double satisfaction. 63 Penn. St. lOS. When goods or securities are deposited as security for the payment of a usurious debt, the creditor is entitled to hold them, and is obliged to surrender them or account for them, on payment of the debt thereby secured, with lawful interest. The action for a conversion of the things pledged may be brought within six years. 69 Penn. St. 408. 1 Green V. Green, 9 Cowen, 46; Abbott v. Draper, 4 Denio, 51; Pang v. Brown, 2 Hill, 4S5; Lockwood v. Barnes, 3 Hill, 128; Thomas v. Dickinson, 12 X. Y. :'.!U; Mannen v. Bradberry, si Ky. 1.53. - Baldwin v. Palmer, 10 N. Y. 232; Watkins v. Push, 2 Lans. 234. Pledges or Pawns- 179 contract on his part is entitled to recover it back the same as if it were money paid thereon, where the contract is mutually rescinded, or where the other party refuses to fulfill.^ § 229. When the principal debt or obligation is conditional, the pledge depends upon the same condition ; and it is not available tuitU the debt itself matures.^ A defense against the principal debt, based on fraud or duress, enables the owner to recover the pledge ; it dissolves the tie by which the pledgee holds it.' A payment or tender of the amount due accomplishes the same thing ; it discharges the lien, and gives the owner the right to take back his pledge.* When the pledge itself is obtained by fraud, the pledgee acquires no interest in it ; it may be recovered from him in an action at law.' § 2.30. In order to release a pledge, the pledgor must cancel or pay the principal debt, with interest.^ To justify an action at law for the things pledged, he must either pay or make a legal tender of the amount due and demand the pledge ; ' and he ought to do the same thing before bringing his suit in equity to redeem.^ In ordinary cases the pledgor's remedy is direct and sufficient at law ; and he has no occasion to appeal to a court of equity. Where it is necessary to take an account, with a view to ascertain the terms on which a redemption should be allowed, the pledgor is entitled to relief in equity." Hence where goods are pawned as security on a running account, the pawnor may, after a re- fusal of his offer to account with and pay the pawnee the amount to be found due, file his bill for an accounting and redemption ; the pawnee can neither defeat nor delay his right to redeem by refusing to account.^" § 2.31. The creditor holding a pledge as collateral security for the payment of a debt may bring his action to recover the amount due. 1 Burlingame v. Burlingame, 7 Cowen, 92 ; Eice v. Peet, 15 John. R. 503 ; Hellman V. Strass, 2 Hilton, 9. 2 Code of Louisiana, Art. 3104; Dykers v. Allen, 7 Hill, 497. 3 Osbom V. Eobbins, 36 IST. T. 365. ■•Haskuis V. Kelly, 1 Eobt. 160; Elliot v. Armstrong, 2 Blackf. 198; McLean v. Walker, 10 John. R. 471; Lawrence v. Maxwell, 53 K. T. 19, 23; Wyckoff v. Anthony, 90 X. Y. 442; Mitchell v. Eoberts, 17 Fed. Eep. 776; Duncan v. Brennan, 83 N. T. 487; Cass v. Higenbotom, 100 N. T. 248; Norton t. Baxter, 41 Minu. 146. 5 Mead v. Bunn, 32 N. T. 275. ^ Bigelow V. Young, 30 Georgia, 131; Hendrix v. Hannan, 19 S. C. 483; Hudson v. Wilkinson, 61 Texas, 606. ' Butts V. Burnett, 6 Abbott, N. S. 302; Bateman v. Pooler, 15 "Wend. 637; Strong V. Black, 46 Barb. 227. ^ Dunham v. Jackson, 6 Wend. 22. 8 Durant v. Einstein, 5 Eobt. 423, 436. See Robinson v. Hanley, 11 Iowa, 410; Dono- hoe T. Gamble, 38 Cal. 340. " Beatty v. Sylvester, 2 Nev. 228; Vaupell v. Woodward, 2 Sand. N. Y. Ch. 143. 180 Law of Bailments. The mere fact that he has taken a pledge to secure the debt does not limit his remedy to recover it ; does not affect the remedy given him by law, unless he thus limits or confines himself by contract.^ Nor will the recovery of a judgment, or the issue of an execution upon it, release the pledge, so long as the debt remains unsatisfied.^ The pledge is to be treated consistently as a security for payment : unless there be a contract to that effect, the pledgee is not obliged to sell it; he may rest upon his security and leave his debtor to make his own arrangements and pay the debt." § 2.32. The relation of the subsidiary to the principal contract appears in many ways : the extinguishment of the principal puts an end to the subsidiary, because the first is the foundation of the second contract. If a defense arises against the principal debt on the merits, it may be used equally to liberate the pledge^ (an alleged defense is not suf- ficient, it must be established). However valuable the pledge may be, the creditor is entitled to nothing more than his debt ; ^ and he is not allowed to hold it as security for any other demand." He holds the pledge for his own benefit ; the contract does not create a trust for the benefit of any other party.' The pledge is given to secure the debt ; that is, to insure its actual payment ; hence the pledgor cannot recover the pledge on the ground that the principal debt is barred by the 1 Whitwell V. Brigham, 19 Pick. (Mass.) 117; Ball v. Weytli, 09 Mass. 3-38; EMioh v. Ewald, 66 C'al. 97. 2 Fishery. Fisher, 98 Mass. 303; Morse v. Woods, 5 N. H. 297; Chapman v. Clough, 6 Vt. 123; McCullough v. Hellman, 8 Oregon, 191. It is held in Iowa that if the pledgee attaches the goods pledged as the pledgor's property, he abandons the lien of his pledge. Citizens' Bank v. Dous, 68 Iowa, 460. 8 Badlam v. Tucker, 1 Pick. 400; Robinson v. Hurley, 11 Iowa, 410; Rozett v. McClellan, 48 111. 345. * Whitlock V. Stewart, 13 Ala. 790. In this case a man lent his note to the payee and took a pledge to secure its pa;yment, and the payee lost it in gaming; being noti- fied of this fact, it was held that the pledgee was bound to abstain from doing anything to defeat the pledgor's remedy. 5 Jessup V. City Bank, 14 Wis. 331. «St. John V. O'Connel, 7 Porter (Ala.), 466; Gilliot v. Lynch, 2 Leigh (Va.), 493. Duncan v. Brennan, 83 N. Y. 4S7; Continental Nat. Bank v. Bell, 12:) N". Y. 38; Wyckoff V. Anthony, 90 N. Y. 442; Vanderzee v. Willis, 3 Bro. Ch. 21; Jarvis v. Rogers, l.") Mass. 389; Newman v. Greenville Bank, 67 Miss. 770; Masonic Savings Bank v. Bangs, 84 Ky. 135; Woolley v. Louisville Banking Co., 81 Ky. 527; Fridley v. Bowen, 103 111. 033; Talmage v. New York Bank, 91 N. Y. 531; San Antonio Nat. Bank v. Blocker, 77 Texas, 73; Loyd v. Lynchburg Nat. Bank, 14 Va. L. J. 173. The pledge may by agreement become a general security. Moors v. Washburn, 147 Mass. 844. ' Peck V. Morrell, 26 Vt. 686. Pledges oh Pawns. 181 statute of limitations ; * the statute operating upon the remedy and not upon the debt.^ § 233. The delivery of a chattel as a pledge, in anticipation of a loan of money to be made thereon, is strictly conditional ; it conveys no in- terest until the loan is made. Unless the money is advanced, a refusal to return the chattel is a conversion of it. A cause of action thus aris- ing is assignable; but a specific sale of the chattel, after the conversion, does not of itself transfer the cause of action. There must be a subse- quent demand made by the purchaser.^ A contract for a pledge, ineffectual for the want of a delivery of the goods, is rendered valid by a subsequent delivery of them ; in the absence of fraud, the pledgee first acquiring the possession, may hold the goods. In other words, the contract of pledge is incomplete until the delivery is made ; and in these circumstances there is nothing to prevent a cred- itor from acquiring a lien upon the goods, and thus defeating the pledge ; nor is there anything to prevent a completion of the contract of pledge by a subsequent delivery.* § 234. Pledgees Duty in Preserving. The pledgee impliedly stipu- lates that he will take ordinary care of the things pledged. Since the bailment is beneficial to the pledgee by securing the payment of his debt, and to the pledgor by procuring him credit, the law prescribes ordinary care as the measure of the bailee's duty in preserving the property ; ° a rule prescribed by natural reason and enforced in our law from the days of Bracton.' The bailment being beneficial to both par- 1 Jones V. Merchants' Bank of Albany, .5 Robt. 162; Roots v. Mason City Salt & Mining Co., 27 W. Va. 483; Hudson v. Wilkinson, 61 Texas, 606; Eumsey v. Laidley, 34 W. Va. 721. 2 Pratt V. Huggins, 29 Barb. 277; Thayer v. Mann, 19 Pick. 535; Bank of the Me- tropolis V. Gutschlick, 14 Petera, 19, 32. 3 Hall V. Robinson, 2 N. T. 293; McKee v. Judd, 12 N. T. 622; The People v. Tioga Common Pleas, 19 Wend. 73. * Parshall v. Eggart, 54 N. T. 18. A pledge comes under the statute against fraudu- lent conveyances and contracts ; and the question of fraud is one of fact for the jury. 6 Arentv. Squires, 1 Daly, 347 ; Abbett v. Frederick, 56 How. Pr. R. 68; Cooper v. Simpson, 41 Minn. 46; Willets v. Hatch, 132 N. T. 41; Cutting v. Marlor, 78 N. T. 454. 8 Bracton, 99 6. Henry de Bracton is supposed to have been a judge or justiciary. He wrote his treatise, De Legibus et Consuetudinibus Anglice, as early as the reign of Henry III. His quotations come down to the forty-sixth year of that long reign of fifty-six years, which commenced in 1217. Almost nothing seems to be known of his personal history, notwithstanding he held for a long period so high a place as one of the authorities of the English law, and was cited, as late as the time of Lord Coke, as the first source of legal knowledge. He is admitted to have been a master of the com- mon law, and he quotes the Roman Code with great freedom; from which he is sup- 182 Law of Bailments. ties, the duty of the bailee in the keepLag of the property is substan- tially the same as in a bailment for hire. He is bound to keep and pre- serve the property with ordinary care ; that care which a prudent man ordinarily takes of his own property. He is not bound for the exactest care and diligence required of a borrower ; and he is liable for a greater degree of care than the law exacts of a depositary without reward.^ § 235. The pledgee is not liable for a loss of the pledge by fire or by theft, where he has kept it with ordinary and reasonable care, consider- ing the nature of the property. By itself, the fact of a loss by theft does not render the pledgee liable ; it bears upon the question of diU- gence ; it calls for some explanation ; the pledgee is liable where the theft is occasioned by his negligence, and he is not liable where the property is stolen without any want of due care on his part.^ The pledgee is bound to exercise that sort of care of the goods which a man of business takes of his own property of a hke kind ; he is bound to employ the usual means for their safe keeping. And where he uses the property in any manner, it is quite clear that he must take addi- tional care to prevent loss or injury from such use.'* Usiag the pledge without any express or implied permission, he ought to bear the risk of all losses arising from his use of the property. But where the pledge is of such a nature that the pledgee is at a charge for its keeping, as a horse or cow, he may use the horse in a reasonable manner, or milk the posed to have derived his clear, nervous , and expressive style. Many of our current maxims came to us through him from the civil law. 2 Reeves' English Law, 88, 90; 2 Ld. Eaym. 909. See also, Lives of the Chief -Justices, by Lord Campbell, 1 vol. p. 78. 1 Erie Bank v. Smith, Eandolph & Co., .3 Brewster, 9; St. Losky v. Davidson, 6 Cal. 643; Commercial Bank v. Martin, 1 La. Ann. 344; Petty v. Overall, 42 Ala. R. 145; Jenkins v. The National Village Bank, etc., 58 Maine, 27o. See Ouderkirk v. Central Nat. Bank, 119 >f. Y. 203, as to the liability of a bank for the loss of bonds held as collateral seciu'ity for discounts after the last note discounted has been paid. For a case illustrating the liability of a depositary without reward, see Lancaster Co. Na- tional Bank v. Smith, 02 Penn. St. 47; and for a case applying the rule of liability of the borrower of bonds to be used as a pledge for advances, see Archer v. Walker, 38 Ind. 472. That the pledgee is liable for the same degree of care as a bailee for hire is assumed in all the cases. Jenkins v. The National Village Bank, supra ; Feld v. Brackett, 56 Maine, 121 ; Schmidt v. Blood, 9 Wend. 208 ; Bakewell v. Talbott, 4 Dana (Ky.), 216, a peculiar case. 2 2 Kent's Conuu. 580, 581; per Chief-Justice Holt, 2 Ld. Eaym. 909; Jenkins v. The National Village Bank, etc., supra, .j8 Maine, 275; Petty v. Overall, 42 Ala. E. 145; Abbett v. Frederick, 50 How. Pr. E. 68; Ouderkirk y. Central Nat. Bank, 119 N. T. 263. Where the goods are placed in a given store for safe keeping with a mutual understanding, a removal of them by the pledgee will go far to establish his liability for a subsequent loss. St. Losky v. Davidson, 6 Cal. 643. 3 Thompson v. Patrick, 4 Watts (Pa.), 414. Pledges oe Pawns. 183 cow in recompense for the meat.^ The use not bemg the object of the contract, the pledgee has no implied permission to use a pledge for the keeping of which he incurs no expense.^ § 236. Where the goods are lost, it is incumbent upon the bailee to account for his failure to restore them, by showing a loss by some vio- lence, theft or accident ; this being done, the burden of proving a want of due care rests with the bailor ; and he cannot recover unless the facts and circumstances in evidence show a want of due care on the part of the bailee, and a loss or injury arising therefrom.'' Where the bailee is bound for ordinary diligence, and wholly fails to restore the goods, it is incumbent upon him to show a loss under such circumstances as will exculpate him ; and this sometimes casts upon him the burden of proof upon the main issue in the cause.* But if the plaintiff's right to recover depends iipon proof of a loss by the defendant's negligence, the affirma- tive must be estabUshed by the plaintiff ; the law cannot presume the fact in his favor, though the jury may find it from the circumstances attending the loss.' Proof of a loss by fire does not ordinarily raise a presumption of negli- gence on the part of the bailee ; that being one of the casualties against which most men guard themselves by insurance.* More intentional, if not more habitual, care is generally taken to prevent losses by theft and embezzlement ; and hence the omission of customary precautions in the line of business affords some evidence of negligence ; such as the failure to lock up the premises where the goods are stored, or the neglect to secure valuable articles, negotiable bonds and securities in a place of safety, or the neglect to adopt approved methods of guarding against robbery and theft.' § 237. The bailee receiving a benefit from his services, stands in the relation of a trustee of the property and is bound to keep it with the 1 Per CWef-Justice Holt, in Coggs v. Bernard, 2 Ld. Eaym. 909, 917. "The pledge is given as security; it does not imply any intent to give the pledgee an indirect benefit; he must therefore account for whatever income he receives from the pledge. Houton v. HoUiday, 2 Murphy, N. C. 111. »Foot V. Storrs, 2 Barb. E. 326; Schmidt v- Blood, 9 Wend. 268. The bailee must give some account of the property. Bush v. Miller, 1.3 Wend. 481. * Arent v. Squires, 1 Daly, 847; Schwerin v. McKie, 5 Eobt. 404, 419. ^Lamb v. Camden & Amboy E. E. & Tr. Co., 46 N". T. 271, 278. * 46 N. T. 271, 278-282. Is a loss by fire on one's own premises presumptive evidence of negligence ? See Judge Peckham's dissenting opinion, 46 N. Y. 285. ' Schwerin v. McKie, supra, 5 Kobt. 405. The defendant, a warehouseman, failed to deliver 52 boxes of cigars, part of a large parcel, and there was some proof of negli- gence by omission of proper fastenings. See Erie Bank v. Smith, Eandolph the rule. Pledges oe Pawns. 199 the pledgee, though Uable in damages for a breach of the contract, is permitted to set off his demand in the action.^ And the pledgor cannot prevent this by bringing an action of trover ; he cannot by merely chang- ing the form of his action entitle himself to recover damages greater than the amount to which he is in law entitled, according to the true facts of the case and the real nature of the transaction.^ The plaintiff recovers his damages, namely, the value of the property, less his debt.' In trover by a lienholder, against ■ the general owner or against any one claiming under him, the plaintiff recovers the value of his interest in the goods ; this rule is well settled.^ Against a stranger he recovers their full value.^ . § 258. We have seen that a legal sale, or a sale made with authority, transfers the title to the collaterals." What is the effect of an unauthor- ized sale by the pledgee, on the title to the things pledged ? In a trans- fer of stocks, where the pledgee is entrusted with the title, the purchaser paying value in good faith, will certainly acquire the title, disencum- bered of the trust ; because here the owner invests the pledgee with the title, and arms him with written authority to transfer the property. And the effect is the same where the pledgor entrusts the pledgee with a blank power of attorney, to make the transfer on the books of the cor- poration.' The purchaser naturally relies upon the indicia of title, and is entitled to the property where he buys it in good faith, from a party holding a written power to transfer it.' Considered as a mere agent, the pledgee has authority to sell under certain circumstances ; and the 1 The defense may be set up under the Code as a counterclaim. Seaman v. Eeeve, 15 Barb. 454; Johnson v. Stear, 15 Com. B. (K. S.) 338; Hart v. Miller, 17 Gratt, 187; Lane v. Bailey, 47 Barb. 395. Where the plaintiff pledged a watch to secure the pay- ment of a debt he was owing, and the defendant obtained possession of it in right of the pledgee and sold it prematurely, and received for it other property; it was held the plaintiff could not recover in assumpsit for money had and received. Kidney v. Persons, 41 Tt. 386. ^Md. Fire Ins. Co. v. Dalrymple, 25 Md. 242; Baltimore Marine Ins. Co. v. Dal- rymple, 25 Md. 269, 309; Seaman v. Reeve, supra; Brierly v. Randall, 17 Q. B. 937; Chinery v. Viall, 5 Hurl. & Nor. 288. 3 Parish v. Wheeler, 22 N. T. 494, 511, 515; Manning v. Monaghan, 28 KT. T. 585; Chadwick v. Lamb, 29 Barb. 518; this case overruled on another point, 35 N". T. 277; 42 N. T. 324. * Spoor V. Holland, 8 Wend. 445; Russell v. Butterfield, 21 Wend. 300, 303. See Allen V. Judson, 71 N. T. 77; Fowler v. Haynes, 91 N. Y. 346. 6 Alt V. Weidenberg, 6 Bosw. 176. « Ante, § 256. ' In re Tahiti Cotton Co. ; Ex parte Sargent, 7 English R. 813; Law Rep. 17 Equity Cases, 273. 8 Crocker v. Crocker, 31 N. Y. 507; Dillaye v. Com. Bank of Whitehall, 51 K. Y. 345. 200 Law of Bailments. facts justifying the sale are peculiarly within his knowledge ; his position is not unlike that of a factor, under mstructions limiting the price at which he may sell the goods in his hands ; and though he violates his instructions or departs from the understanding under which he holds the property, a sale made by him in the usual course of business is valid.' The form of the transaction shows a clear intent to place the stock under the control and at the disposal of the pledgee ; and it is noticeable that the remedy usually chosen in -these cases assumes that the trans- fer is effectual, though unauthorized in the actual situation of the parties ; " and such is at length the settled, understanding of the law.' § 259. At common law, goods pawned or pledged, are not liable to be taken in execution in an action against the pledgor.* The possession of the pledgee could not be disturbed, because the officer could acquire no greater interest in or control over the property than that possessed by the defendant, against whom he held the process of the court. And as Ijublic sales of personal property, not within the view of the bidders at the sale, were declared void by judicial decisions, on the plainest grounds of pubhc policy, it became extremely difficult to sell even the pledgor's interest in the property on execution.'* Where the property was so sit- uated that it could be brought within the view of the bidders, it seems, property in the nature of a pledge might be sold on execution, but not so as to defeat the interest of the pledgee." The interest of the bailor could be sold, but the possession of the bailee having a lien or special property in the goods levied upon could not be disturbed ; there could be, in fact, no taking or actual seizure under the execution.' Hence it frequently happened that the pledging, of many kinds of personal prop- erty, operated to place them beyond the reach of an execution ; and this induced the passage of the statute in this State, authorizing a sale of the pledgor's right or interest in the goods or chattels pledged for 1 Little V. Barker, 1 Hoff. Ch. R. 487; Fatman v. Lobach, 1 Duer, 354; Leavittv. Fisher, 4 Duer, 1, 20; Kortriglit v. Com. Bank of Buffalo, 22 Wend. 348, 360; N. Y. & N. H. Railroad Co. v. Schuyler, 34 N". Y. :!0, SO; Bridgeport Bank v. N. Y. &. N. H. R. R. Co., 30 Conn. 270. See Ballard v. Brugett, 40 J^". Y. 314. 2 Wilson V. Little, 2 N. Y. 44:?; Romaine v. Van Allen, 2(1 N. Y'. 309. See Mooro V. McKibben, :33 Barb. 246; Sargent v. Blunt, 16 John. 74; and Scott v. Rogers, 31 N. Y. 676. 8 McNiel V. Tenth Nat. Bank,'4ij X. Y. 325; Moore v. Met. Nat. Bank, 5.5 X. T. 41. * Wilkes V. Ferris, 5 John. R. ::i",i;; JIai-sh v. Lawn-nce, 4 Cowen R. 4iU; Badlam . . Tucker, 1 Pick. 389; Pomeroy v. Smith, 17 Pick. S5; Scott v. Sholov, S East, 407; Metcalf V. Scholey, 5 Bos. A Pull. 461. 6 Linneudoll v. Doe and Terhune, 14 John. R. 222; Sheldon v. Soper, id. 352; Cres- son V. Stout, 17 John. It. 116. " Moore v. Hitchcock, 4 Wend. R. 292; Wheeler v. McFarland, 10 Wend. R. 318. ' Reynolds v. Shuler, 5 Cowen R. 323 ; 7 Cowen R. 73)5 and 670. Pledges oe Pawns. 201 the payment of money, or for the performance of any contractor agreement.' "Under this statute the question was seriously litigated whether the sheriff, holding an execution against the pledgor, may by virtue thereof take the property pledged out of the hands of the pledgee into his own possession, for the purpose of selling the interest of the pledgor therem. And it was held, first, that the right and interest of the pledgor cannot be sold on execution unless the goods be present and within the view of those attending the sale;^ that for the purpose of the sale the sheriff may under this statute seize and detain the goods in the same manner as if they were not under pledge, but that he must sell them subject to the lien t)f the pledgee ; and that after the sale he must hold them in the custody of the law to await a redemption by the purchaser. If not redeemed presently, the sheriff must then deliver them again into the custody of the pledgee, to whom the purchaser must look for them. The effect of such a sale under the statute is to vest in the purchaser the precise right and interest of the pledgor. Afterwards the purchaser may of course redeem upon the same terms." 1 Bailey v. Burton, 8 Wend. K. 339; 2 E. S. p. 464, 3d. ed. This statute is sub- stantially re-enacted in section 1412 of the Code of Civil Procedure. ^Blackwell v. Ellsworth, 6 Hill K. 484; Franklin's Case, 5 Eep. 47. See Tift v. Barton, 4 Denio, 171. * Stief V. Hart, 1 N. T. 20. Legislation recognizes the rights of both parties, and protects them in different ways. Maike. — A creditor may attach personal property held under a mortgage or pledge and sell the same, provided he first pays or tenders the amount due to the pledgee or mortgagee; and he may take first from the proceeds of the sale the amount paid to redeem. E. S. of Maine of 1871, page 623. The same rule holds where an officer sells on execution. Id. 669. The statute applies where there exists a valid lien by a pledge or mortgage. Birch v. Eoberts, 50 Maine E. 395. The levy or attachment may pre- cede the tender or payment, under the statute. Barrows v. Turner, 50 Maine, 127. Massachtjsetts. — The debtor's personal property may be attached and held as if it were unincumbered; but the attaching creditor must within ten days pay or tender to the pledgee, mortgagee, or lienholder the sum for which the property is held; i. e., ten days after a demand made by the lienholder, with a written statement of the amount claimed. Unless the creditor pays or tenders the amount due, the attachment is to be dissolved, and the property restored. Gen. Statutes of 1860, pp. 627, 727. The law requires a payment of the lienholder' s demand according to the statement required by the statute ; and the statement must be made within a reasonable time. Simonds V. Parker, 3 Met. 144; Johnson v. Sumner, 1 Met. 172, 294, 325, 515. Ko technical strictness is required by the lienholder in pointing out the parcels of the property covered by the lien. Averill v. Irish, 1 Gray (Mass.), 254. If a mortgagee intends to rely upon the remedy given by the statute, he must not assume to dispose of any part of the goods after the attachment is levied. He is entitled to his debt, and the attach- ing creditor is entitled to the property. Granger v. Kellogg, 3 Gray, 490. New Hampshiee. — " Any personal property not exempt from attachment, subject 202 Law of Bailments. § 260. It is to be noticed that the effect of a sale on an execution against the pledgor is not in any respect to vary the terms of the con- to any mortgage, pledge, or lien, may be attached as the property of the mortgagor, pledgor, or general pwner;" the officer or creditor paying or tendering the amoimt for which the same is held. The officer or attaching creditor has a right to demand of the pledgee or lienholder an account on oath of the amount of the debt for which the property is held; and unless the same is given within iifteen days, and given hon- estly, the lien is held discharged. General Statutes (1867), pp. 417, 418, §§ 17, 18. A true and fair accoxint satisfies the statute. Barton v. Chellis, 4.j X. H. 1.35. Personal property may be sold on execution against the mortgagor or pledgor in the same man- ner as it may be attached ; and where the officer or creditor pays the debt secured, he is entitled to apply the proceeds of the sale to pay the amount so paid in order to re- lease the property, and the balance on the execution. Gen. Statutes, p. '441. The theory of the statute is that the pledgee or lienholder is entitled to be protected in liis rights; and that he cannot be disturbed in his possession otherwise than is allowed by statute. Briggs v. Walker, 21 N. H. 72. A trustee process does not prevent the pledgee from proceeding to a sale. Chapman v. Gale, 32 X. H. 141 . Vermont. — Personal property held by any one as lessee, bailee, pledgee, or by virtue of any contract establishing a reversionary interest or title, may be attached and levied upon as the property of the lessor, bailor, pledgor, or person owning the reversionary interest, subject to the title or interest of the lessee or pledgee ; and the reversionary interest maybe sold. General Statutes (1802), 2d ed. Appendix, 1870, pages 29.3, 2(14. Pennsylvania. — The statute allows a sale of goods or chattels held as a pledge, on execution, subject to the rights and interests of the pledgee or pawnee, bailee or lessee. 1 Brightly' s Purdon's Digest, C3.j. Under the statute the practice is to allow, on motion, an execution to sell the pledgor's interest; so allowed where stocks were held as a pledge or security. Freeman v. Simons, 7 Phila. Pi. 307. New Tokk. — The terms of the statute allow a sale of the defendant's interest on an execution against the pledgor, and provide that the purchaser shall acijuire that in- terest or right, and shall be entitled to the possession of the goods or chattels on com- plying with the terms and conditions of the pledge. 3 E. S. (U.l, 5th ed. The statute does not authorize anything adverse to the rights or the interest of the pledgee; Bake- well V. Ellsworth, 6 Hill, 484; and it makes no provision for a sale of the interest of a mortgagor of chattels; it leaves that under the rule of the common law. HuU v. Carnley, sheriff, 11 N. Y. 501, 505. The new Civil Code of Procedure of Kew Tork has the following, § 1412 ; " The interest of the judgment debtor in personal property, subject to levy, lawfully pledged, for the payment of money, or the performance of a contract or agreement, may be sold, in the hands of the pledgee, by virtue of an exe- cution against property. The purchaser at the sale acquires all the right and interest of the judgment debtor, and is entitled to the possession of the property, on comply- ing with the terms and conditions upon which the judgment debtor could obtain pos- session thereof. This section does not apply to property of which the judgment debtor is unconditionally entitled to the possession." Judging from the marginal note, this section is not intended to change the effect of the previous statute; this note is in these words : "Interest of bailor in goods pledged may be sold." Michigan.— The statute allows a sale on execution of goods or chattels pledged by way of mortgage or otherwise to secure the payment of money or tin' performance of any contract, subject to the lien; and permits the purchaser to pay the amount secured Pledges oe Pawns. 203 tract of pledge.^ If the pledge be made to secure tlie payment of a sum of money to fall due at some future time, or to secure the pledgee against a conditional liability that may or may not accrue against him, and which cannot be determined at the time of the sale, it is manifest that the goods pledged must abide the terms of the contract under which the pledgee holds them. The purchaser's right of redemption is the same exactly, and dependent upon the same terms and conditions as that of the pledgor.^ He is entitled to possession of the goods, on com- plying with the terms and conditions of the pledge ; and when these cannot be complied with until some future event has occurred, the pledge must of course be redelivered into the hands of the pledgee. § 261. This statute, in common with the statute law of neighboring States, concedes to the officer rights over the pledged goods which the defendant in the execution could not exercise ; it allows him to levy upon and seize the goods at a time when the pledgor has neither the possession, nor any right of control over them — action to be justified only on the ground of public policy. To prevent frauds, the law allows a sale of the pledgor's interest, and also provides that the sale of per- sonal property shall be made in such a manner that the same may be inspected, and may sell to advantage.' By necessary implication, the or fulfill the contract at any time before the actual foreclosure of the mortgage or pledge. 2 Compiled Laws, 1871, page 1741. The lienholder's rights and interests are protected equally under proceedings by garnishment. Id. 1819. Lidependent of the statute, the interest of a mortgagor of chattels not entitled to hold them for any definite time, cannot be levied on and sold under an execution; he has no legal or vendible interest. Eggleston v. Munday, 4 Mich. (4 Gibbs) 29.5. A payment in any manner of the debt secured by a chattel mortgage, extinguishes the title held by the mortgagee. Place v. Grant, 9 Mich. (5 Cooley) 42. All property pledged as security for a debt reverts to the original owner upon the extinguishment of the debt. Merrifield v. Baker, 9 Allen (Mass.), 29. 1 Stief V. Hart, 1 N. T. 20. Stief brought replevin against Hart, sheriff, for a quan- tity of goods which defendant had levied upon and taken on execution; on the trial it appeared that the plaintiff held them in pledge, and that the sheriff took the goods from his custody on an execution against the pledgor; and the circuit judge charged the jury that the sheriff had a right so to take the property into his possession in order to sell the pledgor's interest therein. Plaintiff excepted, and moved the Supreme Court for a new trial; the motion was denied, and the Court of Appeals affirmed the judgment of the Supreme Court by a vote of four to four. It will be noticed that under the Code provision the pledged property may be sold " in the hands of the pledgee." Code of Civil Pro. § 1412. 2 Bakewell v. Ellsworth, 6 Hill K. 484; 2 R. S. 464, § 20, 3d ed. » " § 20. When goods or chattels shall be pledged for the payment of money, or the performance of any contract or agreement, the right and interest in such goods of the person making such pledge may be sold on execution against him, and thp purchaser shall acquire all the right and interest of the defendant, and shall be entitled to the 204 Law of Bailments. statute allows the officer to take and expose the goods for sale.i It authorizes the sale, and it prescribes the manner in which the officer must sell. It goes no farther ; it does not authorize him to deliyer the goods to the purchaser ; it only declares the purchaser's right to the possession, on complying with the terms and conditions of the pledge. He takes therefore by his purchase the equity of redemption, and noth- ing more ; the same as a purchaser of property covered by a chattel mortgage.- With this difference, on a sale of the mortgagor's interest in goods, where he has a right to the possession of theni for a definite period, the goods may be delivered to the purchaser." There are other cases in which the law clothes the officer with rights superior to those of the defendant in the execution. Where one of two partners has the actual possession of the partnership property, the o&- cer with an execution against the other partner is armed with an author- ity to seize the partnership goods, and to use force if necessary to take them into his custody ; and that not merely for the temporary purpose of effecting a sale and then restoring the possession, as in the case of pledged goods ; but the sheriff is authorized to deliver the possession to the purchaser. In order to make a sale of the interest of the defend- ant in the execution, he has the right to levy upon and take the goods into his possession — a greater exercise of power than the law accords to that defendant himself.* § 262. It is the duty of the sheriff' to offer the property for sale in such lots and parcels as shall be calculated to bring the highest price ; and in the fulfillment of this duty, it is proper for him to sell several articles and different kinds of property, covered by a chattel mortgage, in one parcel ; for unless one man purchases the whole, he cannot ac- quire the equity of redemption ; there being no legal way of apportion- possession of such goods and chattels, on complying with the terras and conditions of the pledge." 3 E. S. 64."), 5th ed. N. Y. The mode of sale is the same as in other cases. Id. 648. 1 Bakewell v. Ellsworth, 6 Hill, 484; Stief v. Hart, 1 X. T. 20; 'Wmiams v. Amory, 14 Mass. 27. ^TVliitev. Cole, 24 Wend. 116, 141; Bakewell v. Ellsworth, 6 Hill, 484; Wheeler v. McFarland, 10 Wend. .318. 8 Hull V. Carnley, 11 N. Y. 501. It is criminal in the mortgagor to sf U the goods with intent to defraud a mortgagee or purchaser. X. Y. La•^^ s of lP-71 , C'h. 77. * Phillips V. Cook, 24 Wend. ;389; Melville v. Brown, 15 Mass. 82; AVadadl v. Cook, 2 Hill, 47. The judgment being recovered against a partner for his individual debt the sheriff can only sell the defendant's interest. Walsh v. Adams, 3 Denio, 125; Berry v. Kelly, 4 Robt. R. 106, 123. The interest of a special partner in a limited partnership cannot be sold on execution. Harris v. Murray, 28 X. Y. 574. For the release of the partnership property from the le\y under an execution against the indi- vidual property of a partner, see Code of Civil Procedure, §§ 1413-1417. Pledges or Pawns. 205 ing the lien of the mortgage relatively upon the different parcels of property.! j^ g^ie in parcels to different parties, therefore, tends to a sacrifice of the property and is injurious to the mortgagor ; it is also in some cases very prejudicial to the mortgagee, dispersing and placing the property beyond his reach. On both accounts it ought to be sold in mass, and subject to the lien.^ The same rule must hold good on a sale of personal property subject to the pledgee's lien. If we assume that the things pledged are about equal in value to the debt they are held to secure, it is evident that on a sale of them in different parcels to different persons, they will scarcely be vendible at any price ; because no single purchaser can affosd to re- deem the pledge, and the law does not enable him to redeem it in part. The things pledged must therefore be sold in one parcel, subject to the lien. § 263. We may often ascertain the interest of the parties from the rule defining what may be levied on and sold under execution. Personal property pledged by way of a mortage may, after forfeiture, be levied upon by virtue of an execution against the mortgagee, although it remains in the hands of the mortgagor.* A mere chose in action cannot be levied upon and sold on execution.^ Bonds, notes, shares of stock, and property of that nature cannot be seized and taken in execution by the sheriff ; ^ neither can a mere equity in the proceeds of personal prop- erty be sold on execution." But when the mortgagor of a chattel has a right to redeem and a right to the possession for a definite period before the property can become forfeited, he has such an interest as may be sold on execution.' The purchaser in such cases takes the prop- erty subject to the incumbrance ; he purchases the right of the mort- gagor, which is a right to the possession and absolute ownership, sub- ject to the incumbrance ; but if the mortgage at the time of the sale on execution has been forfeited, the mortgagor has no longer the right of 1 Tift V. Barton, sheriff, 4 Denio, 171. 2 Manning v. Monaghan, 23 N. T. 539, 544; S. C. 28 N. T. 585. 8 Ferguson v. Lee, 9 Wend. E. 258. See also, 4 Denio E. 171 ; Mattison v. Baucus, 1 K. T. 295. It cannot be talcen under an execution against tlie mortgagor. Leadbetter V. Leadbetter, 125 N. T. 290; Manchester v. Tibbetts, 121 IST. T. 219. * Ingalls V. Lord, 1 Cowen E. 240. ^ Denton t. Livingston, 9 Jolm. E. 97. Banii notes or bills may be levied on as money; Handy v. Dobbin, 12 John, E. 220, 395; but not as the money of a party for whom an officer has collected it, until paid over. Dubois v. Dubois, 6 Cowen, 494; Betts V. Hoyt, 19 Barb. 412; 14 How. Pr. 477. 8 Hendricks v. Eobinson, 2 John. Ch. E. 296. ' Bailey v. Btirton, 8 Wend. E. 339; Marsh v. Lawrence, 4 Cowen E. 461; Otis v. Wood, 3 Wend. E. 500; Champlin v. Johnson, 39 Barb. 606. 206 Law op Bailments. possession ; all the right he then possesses is an equity, which cannot be thus sold. So where it is a condition in a lease of personal property that the lessee shall keep it upon particular premises, and not remove it therefrom, a removal of such property by the lessee operates as a forfeiture of the term and divests his title, so that no uiterest in the- property removed remains in him that can be sold on execution ; because by the forfeiture the title is vested in the lessor with the right of immedi- ate possession.! The established principle is that a person m posses- sion of a chattel, having a right to such possession for a specific time, has an interest which may be sold ; and when that interest expires the o^vner is entitled to his goods and may bring an action for them. The officer sells only the interest of the party in possession ; and even though he assumes to sell the absolute property in the goods, the purchaser will acquire no greater right in them than that possessed by the defendant in the execution.^ § 264. Is the pledgee's interest in the things pledged such that it can be levied upon and sold under an execution against him ? His right to them inheres in the debt they are held to secure ; he has no right to derive from them any benefit accruing from the use of them ; separate from the debt, he has no vendible interest in them ; and the debt itself is a chose in action, not capable of sale under an execution. The debt being clue, the pledgee has no interest in the goods pledged for any definite period ; he holds them subject to the owner's call, on payment of the debt.^ Hence a sale of his uiterest on execution will not avail the purchaser unless it carries with it the debt, which is the basis of his interest ; and to give the sale that effect would indirectly authorize the sale of a chose m action under an execution. The theory that the pledgee's lien may be severed from the debt, so that the debt may be owned by one man and the lien held by another, is fraught with many difficulties. His property in the goods is special and quahfled; it is not a distinct and independent right of property; it is a lien, a collateral security ; it is not in its nature capable of separa- tion from the original debt. It is no more capable of being separately sold than a mortgage given as collateral security for the payment of a bond ; only the mortgage declares on its face its ancilliary character. ! 3 Wend. E. 498. In McCracken v. Luce, not reported, it was held, that a mortgagor of a canal boat, in possession and having the right of possession for a certain time, had an interest which was the subject of sale on execution. 2 Van Antwerp v. Newman, 2 Cowen r., 540. ' In Saul V. Kruger, f) How. Pr. 569, the Superior Court of Xew York hold that the pledgee's interest may be levied upon and sold on execution ; and in Felt v. Hege, 23 How. Pr. 3.59, 362, the Supreme Court expresses a contrai-y opinion. Pledges or Pawns. 207 The bond is the principal debt ; the mortgage is only an incident to it ; a transfer of the principal debt carries with it the incident ; but the incident is not capable of being transferred separate from the original debt.i § 265. On the death of a pledgee, his interest in the pledge passes to his legal representatives, together with the debt to secure which it is held. The debt passes by operation of law, and the possession of the pledge accompanies it ; the bailee's death does not otherwise work any change in the right of property, or in the duties resulting from the con- tract of pledge. Equally on the death of the pledgor, his title and rights pass to his legal representatives ; his personal estate vests in them, including the things pledged, subject to existing liens ; no secu- rity or right of property is gained or lost by the pledgor's death.^ § 266. It is not essential that the bailee or lienholder should retain the pledge or collateral security in Ms personal custody ; he does not lose his lien by delivering the property to his agent or servant to hold for him, with notice of his lien. In other words, there is nothing strictly personal in the contract of pledge ; there is nothing in the agreement requiring the pledgee's personal care over the property. He may there- fore store the goods or keep them in the usual manner.' And the con- tract not being of a personal nature, there is nothing to prevent the lienholder from transferring his demand vidth the security which he holds for its payment ; and no rule of law to prevent his transferring both as a pledge or security for a debt of his own provided he does not assume to transfer any more than Ms true interest. The original pledgor is not harmed so long as his right to redeem remains unaffected.* § 267. The pledgor has a remedy for any breach of the contract on 1 Merritt v. Bartholick, 4Y Barb. 253; S. C. 36 N. T. 44. A pledge, like a mortgage, is intended to accompany and secure the principal debt. The pledge gives a lien; so does the mortgage ; by this lien the property is held to pay the debt. An absolute transfer of the bond and mortgage to the mortgagor, the owner of the premises, ex- tinguishes the lien. Angel v. Boner, 38 Barb. 425; Moore v. Hamilton, 48 Barb. 120; S. C. 44 ]Sr. T. 666. 2 Cortelyou v. Lansing, 2 Caiues' Cas. 200; Webb v. Cowdell, 14 Mees. & Wels. 820; Morgan v. Kavey, 6 Hurl. & Nor. 265; Henry v. Eddy, 34 Bl. 508; Middlesex Bank v. Minot, 4 Met. 325. The rule applies to all contracts except those which involve or depend upon the personal skill of the deceased. Wills v. Murray, Exch. E. 866. ' Urquhart v. Mclver, 4 John. E. 103 : holds that a factor may thus preserve his lien. See also, Laussat v. Lippincott, 6 Serg. & Eawle, 386 ; and IngersoU v. Van Bokkelin, 7 Cowen, 6'70, 680. * Nash V. Mosher, 19 Wend. 431; Jarvis v. Eogers, 15 Mass. 408; Whitaker v. Sum- ner, 20 Pick. 399, 406; Moore v. Conham, Owen, 123; Eacliffe v. Davis, 1 Buls. 29; McCombie v. Davies, 7 East, 7; Bullard v. Billings, 2 Vt. 309; Duncomb v. New Tork, H. & N. E. E. Co., 84 N. Y. 190, 208. 208 Law of Bailjvients. the part of the bailee ; he may reclaim the goods pledged, where they have been transferred in violation of the trust. He cannot maintain an action of trespass against a purchaser to whom the bailee wrongfully sells and delivers them, because here he cannot establish a wrongful taking of the property ; his true remedy is by a suit in equity agamst the pledgee and his assignee to redeem, or by an action of trover for the goods, after a demand and refusal ^— an action in which the defendant should be permitted to limit the plaintiff's recovery to the value of the goods, after deducting the amount of the debt to secure which they were pledged.^ A purchaser in good faith should certainly be allowed this degree of protection ; otherwise the plaintiff will recover more than he is entitled to, at the expense of an honest purchaser.^ Vested with express authority to sell or transfer stocks or debentures on a failure to pay the debt or demand for which they are held as a security, the pledgee is liable in damages for a breach of the contract, where he sells before any default or demand of payment is made ; but his unauthorized sale or transfer does not put an end to the contract of pledge ; it does not of itself give the debtor an immediate and uncondi- tional right to reclaim the pledged On the contrary, a bona fide pur- chaser of the pledge acquires an interest in it which cannot be taken from him, without tendering to him the amount due on the pledge.* § 268. The owner of securities or of goods and chattels held in pledge may transfer his interest in them subject to the lien. He cannot com- plete the sale of goods thus situated by an actual delivery ; but he can sell and transfer the title, so that the purchaser will be entitled to them on a payment or tender of the amount for which they are held." In order to render a sale of them valid under the statute of frauds by a ^ Dudley v. Hawley, 40 Barb. .397, and cases there cited: S. C. Spraights v. Hawley, 39 ?r. T. 441 ; Rogers v. Weir, 34 N. T. 4(j:;. See Durant v. Einstein, 35 How. Pr. 223. 2 Lewis V. Varnum, 12 Abbott Pr. 30.5. 8 Ante, § 257. * Donald v. Suckling, Law Rep. 1 Q. B. 5S5. Pledge of debentures as security for an indorsed note, with power to sell on default, and the pledgee again pledged the same before a default for a larger demand; held in detinue that the repledge did not put an end to the contract of pledge, and that the first pledgor could not recover with- out having paid or tendered the amount of the note. Halliday v. Holgate, Law Rep. 3 Ex. 299. A sale of a pledge, scrip of stock, before a demand of the debt, assuming it to be wrongful, does not give the pledgor an immediate right to the possession of the shares; he cannot maintain trover for them without first making a tender of the debt. New York, L. E. & W. R. R. Co. v. Davies, 38 Hun, 477, 480. 5 Talty v. Freedman's Savings & Trust Co., 3 Otto, 321 ; Lewis v. Mott, 30 N. Y. 395. « Bush V. Lyon, 9 Cowen, 52; or where the lien is waived; Bailey v. Adams, 14 Wend. 201, 203 ; the goods cannot be taken, nor the value of them recovered in trover until the lien has been discharged. Wood v. Orser, 25 N. Y. 348. Pledges or Pawns. 209 delivery, the bailee must consent to hold them subject to the buyer's order ; he must attorn to the purchaser.^ But where the sale is in writing, or valid under the statute without a delivery, the consent of the bailee is not required ; the purchaser may demand the goods as a mat- ter of right on complying with the terms of the pledge.^ The pledgee's position does not enable him to prevent a transfer which leaves his rights unaffected. § 269. The rule is that a bailee must retain possession of the goods, in order to preserve his lien upon them.^ Various exceptions have been allowed to this rule ; as where a pledge is delivered back to the owner for a temporary purpose, on a promise to restore it ; * or where it is handed back to the owner for some special purpose, to be returned as soon as the purpose has been fulfilled.* The pledgee of a bond, who hands it back to the pledgor to exchange it for and substitute stock in lieu of it, does not part with his interest.^ And the holder of notes as collateral security does not relinquish his interest in them by giving them to the pledgor to collect or to receive the money upon them.' In these and like cases the pledgor receives back the things pledged in a new character, on a special trust ; and this trust is one which the law will always enforce in suits between the parties, and against third per- sons where the transaction is fair and reasonable.^ The pledgor thus receiving back the pledge holds it as a special bailee, and is bound by the trust, on the same ground as an ordinary bailee.' He is equally liable, where he wrongfully obtains the custody or control of the goods." He is liable in an action of trover or replevin.^^ iDixon V. Buck, 42 Barb. TO; Potterv. Washburn, 13 Vt. 538; Barrowsv. Harrison, 12 Iowa, 588; Biddle v. Bend, 6 Best & Smith, 225; Feltzplace v. Dutch, 13 Pick. 388. 2 Anthony v. Wheatons & Whitford, 7 K. I. 490; Carter v. Willard, 19 Pick. 1; Plessant v. Pendleton, 6 Randolph, 478. ' Homer v. Crane, 2 Pick. 607; Jarvis v. Rogers, 15 Mass. 389. * Roberts v. Hyatt, 2 Taimt. 266; Button v. Arnett, 51 111. 198; Way v. Davidson, 12 Gray (Mass.), 465; Cooper v. Ray, 47 111. 53; Cahn v. Ford, 42 La. Ann. 965. * Macomber v. Parker, 14 Pick. 497. « Hays y. Riddle, 1 Sandf. 248. ' White V. Piatt, 5 Denio, 269; Bank of State of N. T. v. Vanderhorst, 1 Robt. 211, 220; 32 N. T. 553. 8 Cooper V. Ray, 47 111. 53; Jones v. Baldwin, 12 Pick. 316; Reeves v. Capper, 5 Bing. N. C. 136. 9 White V. Piatt, 5 Denio, 269; Way v. Davidson, 12 Gray, 465; Coleman v. Shelton, 2McCord (S. C.) Ch. 123; Cooper v. Ray, 47 111. 53; Hutton v. Arnett, 51 111. 98; Thayer v. Dwight, 104 Mass. 254. See ante, § 223. M Walcott V. Keith, 2 Foster, 196. ^ IngersoU v. Van Bokkelin, 7 Cow en, 670; Rogers v. Arnold, 12 Wend. .30; 7 X. T. 555. A surrender of the pledge with intent to abandon the lien puts an end to the 210 Law of Bailments. § 270. In an action by the pledgee against tlie pledgor for tlie conver- sion of a bond, the measure of the plaintiff's damages is the value of the bond, with interest from the time of the conversion, unless such amount exceeds the sum due to the pledgee ; in which case that sum is the proper measure of damages — that sum being the exact measure of his interest in the security.^ As against a third person tortiously appro- priating or converting a chose in action, the pledgee recovers the value of the security; prima facie he recovers the face of the bond, bill, or note.^ In this action of trover, the plaintiff need not give the defend- ant notice to produce the note or bond ; bringing the suit is a sufficient notice. But the plaintiff must in his complaint set forth or describe the instrument with reasonable precision.^ \ slight variance between the proof and the complaint will not be regarded as material.* § 271. It is the duty of the bailee to keep the things pledged separate from his own ; and if he blends or so confounds them with his own that they cannot be distinguished, he must bear all the inconvenience of the confusion ; if he cannot distinguish and separate his own, he must lose it — a rule which is perfectly just, where the bailee's misconduct admits of no other adjustment.^ The owner may also follow and reclaim his goods from a party receiving them wrongfully and with knowledge.' He may follow and reclaim them when transferred to a party receiving them in bad faith, from a trustee invested with a power of sale ; e. g., when the transfer is made by an executor ; much more when the transfer is made by a pledgee.' But it is equally well settled that an honest purchaser, from a party having the power to sell, will acquire the title.' § 272. The bailee is held to a strict compliance with the terms of his contract, and is bound to apply the proceeds derived from the sale of a interest of the pledgee. Arnold v. Morgan, 5 Sneed, 703. And where the pledgee per- mits the property to go back into the hands of the owner, and remain here indefinitely, the lien ceases against third persons. Day v. Swift, 48 Maine, 368. And it has been held that a surrender of it for a special purpose puts an end to the lien. Bodenhamer V. Newson, 5 Jones Law Rep. 107 ; and see Beeman v. Lawton, 37 Maine, 543. 1 Hays V. Riddle, 1 .Sanil. 248. 2 Ingalls V. Lord, 1 Cowen, 240; Benjamin v. Stremple, 13 111. 466; Little v. Fassett, 34 Maine, 545; "White v. Bascom, 28 Vt. 208; Voltz v. Blackmar, 4 Hun, 139; Thayer V. Manley, 73 X. Y. 305. "Bissel T. Drake, 19 John. R. 06; Pierson v. Townsend, 2 Hill R. 550. « Hays V. Riddle, supra. Under §§ 539, 540, of the Code of Civil Procedure a variance is easily dealt with.' 5 Hart V. Ten Eyck, 2 John. Ch. 62, 108; 1 Cowen, 743; Roth v. Wells, 29 N. T. 471, 486, 491; S. C. 41 Barb. 104. 8 Colt V. Lasmer, 9 Cowen, 320. 'Sacia V. Berthould, 17 Barb. 15. 8 Bogert V. Hertell, 4 Hill, 4U2. Pledges or Pawns. 211 pledge in an equitable manner. If, having two demands aguinst a debtor, he receives a third person's note as security for one debt, and a pledge of the debtor's property for both, and afterwards sells the prop- erty for enough to pay both debts, he cannot pay over a part of the avails of the sale to his debtor, and then maintain an action on the surety's note. The law obliges the pledgee to apply the proceeds of the sale to the payment of both debts, thus relieving the surety.^ Until the pledge is rendered available by a sale, the creditor has a right to hold both securities ; but he cannot as we understand the rule surrender the pledge without discharging the surety.'^ This is on the ground that the pledge enures as a protection to the surety ; and the creditor or pledgee becomes bound to use it as a means of obtainmg payment from the debtor.' § 273. A party receiving a pledge or mortgage as a security for several debts contracted at the same time, must apply the proceeds derived from a sale of the pledge in equal proportion to the discharge of each debt ; with this qualification, that the interest thereon is to be first paid, and the balance applied. On the other hand, if the debts secured by pledge be contracted at different times, and the pledge is deposited as a security for the first, with a subsequent agreement that it shall be retained as a further security for the others, the proceeds derived from the sale must be applied to the payment of the debts in the order in which they were contracted ; for it is to be presumed that the pawnor pledged for the security of the debts last contracted only what remained of the pledge after payment of the first.* § 274. In the appUcation of payments, there are two general rules : 1. where a debtor owes his creditor several debts upon distinct causes, and pays him a sum of money, he (the payor) has a right to say to which debt or debts the money shall be appropriated, provided he directs this at the time of the payment ; and 2. the creditor is free to make the apphcation as he deems proper, where the debtor gives no direction on the subject. These rules are confessedly subject to several quaUfica- 1 Strong V. Wooster, 6 Term. E. 536. 2 Pitts T. Congdon, 2 Comst. N. T. Eep. 352; Chapman v. Clough, 6 Verm. 123 i Grow V. Garlock, 97 N. T. 87; Third Nat. Bank v. Shields, 55 Hun, 274. ^Ramsey v. Lewis, 30 Barb. 403, 414. The surety's right of subrogation implies the same thing. Lewis v. Palmer, 28 N. T. 271 ; and Ellsworth v. Lockwood, 42 N. T. 89, 98. * Van Blarcom v. Broadway Bank, 9 Bosw. 532; S. C. 37 N. T. 540; Herkimer M. & H. Co. V. Small, 21 Wend, 273; S. C. 2 Hill, 127; Pattison v. Hull, 9 Cowen, 747, and note 6, 776. The theory that a corporation authorized to declare a forfeiture of stock for non-payment of calls thereon, holds the stock as a pledge, has been rejected. Small V. Herkimer Manuf. Co., 2 N. T. 330. 212 Law of Bailments. tions.i Without stopping to dwell upon these, it is apparent that the creditor must often have the opportunity to apply a general payment upon the unsecured dehts, leaving those unpaid for which he holds some pledge or security.^ And as this opportunity is given to him on the theory that the dehtor has waived his right to make the application, it is quite clear that he must apply the payment equitably, and at or near the time it is made. Otherwise the law makes the application upon principles of equity depending upon the circumstances ; generally, to the satisfaction of the debts in the order in which they accrued ; and pro rata where moneys are collected on securities embracing them all." § 275. The relation in which the pledgee stands towards the pledgor under his contract is very similar in some respects to that which a fac- tor or commission merchant, who has made advances on the goods in his hands, holds towards his principal ; it is like and imlike. Like a pledgee^ the factor has an interest in and a lien upon the goods for his advances. Unlike the pledgee, the factor ordinarily holds the goods with authority to sell them, in his own name and in the usual manner. A revocation of the factor's authority to sell after advances made leaves him in sub- stantially the situation of a pledgee. As a pledgee, he cannot sell the 1 Patty V. Milne, IG Wend. 557; 22 Wend. 558. The rule giving a creditor holding several obligations or claims against his debtor the right to apply a payment made to him by the debtor, in the absence of any application m.ade by the latter, is confined to cases of voluntary pajrments. The proceeds of a sale under a judgment of foreclosure of a mortgage, given by a debtor to secure various debts, are paid over to the creditor not as a voluntary payment, but by operation of law, and in the absence of any direc- tions given in the security, their application is made by the court in accordance with equitable principles. If the proceeds are insufficient to satisfy all the debts in full, equity will apply them pro rata, each debt sharing in the fund without regard to priority of date, or to the fact that for some of the debts the creditor holds other security. Brid- enbecker v. Lowell, 32 Barb. 9; Cowperthwaite v. Sheffield, 1 Sandf. 416; S. C. 3 N". T. 243; Orleans County Nat. Bank v. Moore, 112 N^. Y. 543; Sanford v. Van Arsdall, 53 Hun, 70. "- See Clark v. Burdett, 2 Hall, 197; Harding v. Tifft, 75 X. Y. 461. 'See Orleans County Nat. Bank v. Moore, 112 N. Y. 540; Thompson v. St. Nicholas Nat. Bank, 113 N. Y. 325. It is assumed in some of the cases that the law will apply a general payment to the secured or more burdensome debt, that is for the benefit of the debtor. Patterson v. Hull, 9 Cowen, 747. But that rule does not seem to be established on any firm foundation; the priority of the debt more often governs the application. Baker v. Stackpole, 9 Cowen, 420; Dows v. Morewood, 10 Barb, is.".; Allen V. Culver, 3 Denio, 284; Truscott v. King, N. Y. 147; and the rules of equity as frequently; Stone v. Seymour & Bouck, 15 Wend. 19-44; Thomas v. Kelsey, 30 Barb. 268; and the contract or security itself as often; that is, where moneys are collected on securities covering all the debts; Bridenbecker v. Lowell, 32 Barb. 9-24; Cowperthwaite v. Sheffield, 1 Sandf. 416; 3 N. Y. 243. The application is sometimes, made on the debtor's implied direction. Berrian v. Mayor, etc., of N. Y., 4 Eobt. 538,^ 551. Pledges ok Pawns. 213 property until he has first demanded payment of the debt secured, and thus given the owner a reasonable opportunity to redeem the property.^ § 276. The pledgee may, but he is not obliged to, resort to the prop- erty for the payment of his demand ; he is not bound to exhaust his security.^ On the other hand, the factor is bound to exhaust the fund in his hands, before he can call upon his principal for reimbursement ; on the gromid that his advances are understood to be made in anticipa- tion of the moneys to be realized from a sale of the goods. ° And left without instructions, he may sell the goods for that purpose ; after that he may call upon his principal for any balance that may remain due to him.* § 277. A pledgee has in some particulars more freedom in dealing with the goods in his hands than the factor is allowed under the com- mon law ; the pledgee may transfer or assign the pledge with the debt secured, and invest his assignee with all his rights in the security, so that practically the assignee may hold the pledge on the same terms and conditions ; ^ on the other hand the factor cannot at common law pledge the goods of his principal for his own benefit to the extent of his lien, or for the benefit of his principal ; as an agent he has no authority to pledge the property ; and if he assumes to do so, without express permission, he is guilty of a violation of his trust ; and his act, being tortious and void, passes no title and can create no lien ; on the contrary, it gives to the owner an immediate right of action for the goods against the pledgee, who is not allowed either to bar a recovery or reduce its amount by any inquiry into the state of the accounts between the principal and his xmfaithful agent. By wrongfully pledg- ing the goods and parting with the possession, the factor loses even his lien.° 1 Allen V. Dykers, 3 Hill. 593; 7 Hill,